The Low-Float Trap: How Jayud's 95% Crash Exposes Market Flaws

LOS ANGELES, CA – December 09, 2025

On April 1, 2025, Jayud Global Logistics Limited (NASDAQ: JYD), a Shenzhen-based supply chain provider, appeared to be a staggering success story. Its stock had climbed nearly 1,100% in five months, reaching an all-time high of $7.97 per share and giving the company a market capitalization of roughly $720 million. By the time the market opened on April 2, that valuation had evaporated. In a catastrophic overnight collapse, the stock plummeted 95.6% to just $0.35 per share, wiping out hundreds of millions in market value and leaving a trail of bewildered investors.

This dramatic rise and fall, which occurred without any corresponding fundamental news from the company, is now at the center of a wave of securities fraud class-action lawsuits. The legal filings allege that Jayud was not a story of organic growth but the vehicle for a sophisticated “pump-and-dump” scheme, meticulously engineered and executed in the digital shadows of the market. The case serves as a stark cautionary tale, exposing how certain modern IPO structures, combined with the power of social media, can create the perfect conditions for market manipulation, leaving retail investors to pay the price.

Anatomy of a Digital-Age Scheme

The allegations laid out in court filings paint a picture of a classic fraud updated for the 21st century. The scheme’s alleged success hinged on two key elements: a tightly controlled share structure and a coordinated misinformation campaign. When Jayud went public in April 2023, it did so with a “low-float” IPO, offering just 1.25 million Class A shares—less than 5% of its total outstanding equity—to the public. The vast majority of the company remained in insider hands, primarily through a dual-class share structure.

This structure granted disproportionate power to insiders. Founder and CEO Xiaogang Geng, through his ownership of all Class B super-voting shares, controlled over 81% of the company’s total voting power. According to market analysts, a low public float creates an environment of artificial scarcity. With so few shares available for trading, even a modest increase in buying pressure can lead to outsized price swings. This volatility is precisely what manipulators look for.

According to the lawsuits, bad actors exploited this structural vulnerability. They allegedly launched a fraudulent promotional campaign using social media, online chat groups, and forums. These efforts reportedly involved impersonating financial professionals and spreading “sensational but baseless claims” to whip up a buying frenzy among unsuspecting retail investors. As the hype built and the stock price soared through late 2024 and early 2025, the trap was set. The lawsuits claim that insiders and their affiliates then used offshore or nominee accounts to systematically “dump” their shares at inflated prices, causing the stock’s value to implode and leaving the public holding worthless stock.

A Trail of Allegations and Investor Recourse

In the wake of the crash, numerous law firms, including Glancy Prongay & Murray LLP and Scott+Scott Attorneys at Law LLP, have filed class-action lawsuits on behalf of investors who purchased JYD securities between April 21, 2023, and April 30, 2025. The deadline for investors to file a motion to be appointed as lead plaintiff is January 20, 2026.

The core of the legal complaints is the assertion that Jayud and its leadership made materially false and misleading statements while failing to disclose critical adverse facts. Specifically, the defendants are accused of concealing:

• The existence of the fraudulent stock promotion scheme.
• The use of social media misinformation to artificially inflate the stock price.
• The coordinated plan for insiders or their affiliates to sell off shares during the price pump.

Crucially, the lawsuits allege that the company’s public statements and risk disclosures in SEC filings were deficient, omitting any mention of the artificial trading activity and false rumors that were the true drivers of its stock performance. As a result, plaintiffs argue that the company’s positive statements about its business and prospects lacked a reasonable basis. The legal actions not only target the company and its executives but have also named its former and current auditors, Friedman, LLP, and Marcum Asia CPAs, LLP, in some complaints, suggesting a belief that accountability may extend to the gatekeepers responsible for financial oversight.

For investors who suffered losses, these lawsuits represent the primary path to potentially recovering damages. The lead plaintiff, an investor appointed by the court to represent the entire class, plays a central role in directing the litigation. However, the process is lengthy and its outcome is never guaranteed.

A Regulatory Challenge for the Digital Age

The Jayud case transcends a single company’s misfortune; it highlights a systemic challenge for regulators like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). While pump-and-dump schemes are as old as stock markets themselves, their execution has evolved dramatically. The era of cold-calling from boiler rooms has been supplanted by viral social media campaigns that can reach millions of investors in an instant, often with a veneer of crowd-sourced legitimacy.

The low-float IPO structure, particularly common among certain smaller, foreign-based issuers, remains a point of regulatory concern. While not inherently illegal, it creates a market dynamic that is ripe for abuse. The ability to control a stock’s price with minimal capital makes these companies attractive targets for manipulators. The incident with Jayud raises pressing questions about whether current disclosure requirements and market surveillance tools are adequate to detect and prevent such schemes before they detonate.

While Jayud itself operates in the tangible world of logistics—touting its own “intelligent logistics IT systems”—its spectacular downfall was driven by the intangible forces of digital communication and financial engineering. This paradox underscores the complex nature of modern markets, where a company's fundamental value can be completely decoupled from its market price by orchestrated online activity. The challenge for regulators is not just to punish wrongdoing after the fact, but to adapt their oversight to an environment where information, and misinformation, moves faster than ever before. For investors, it is a harsh reminder that in the age of AI and digital transformation, the oldest financial scams can find new and devastating life.