On February 18, the Chamber’s Financial Services Committee will hold a virtual hearing to see how GameStop’s stock skyrocketed in value after a bunch of Reddit’s day brokers got together. Committee chairman Maxine Waters released the list of witnesses to the audience, and includes Robinhood CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, as well as YouTube redditor and streamer Keith Gill , also known as Roaring Kitty.
ONE New York Times report details how Gill played a central role in the sudden increase in GameStop’s market value. According to the report, he tweeted and made videos about the retailer throughout 2020, after making a $ 53,000 investment in the company. Several Reddit brokers who followed his videos and posts soared after him, causing a stock market frenzy that led to huge losses for hedge funds that bet against the retailer and expected the stock price to plummet. As a result, Gill’s original investment is now worth $ 48 million.
The traders involved used the Robinhood app, with no commissions, which temporarily restricted users from trading GameStop and some other actions due to the lack of available money. Robinhood started allowing “limited purchases” of restricted shares a few days later, but not before it was hit by a class action lawsuit accusing it of depriving its customers of the ability to use its service in an effort to “manipulate the market for the benefit of people and financial intuitions. “
The Senate Banking Commission previously announced that it will hold a hearing “on the current state of the stock market” after the event. As for the House Financial Services Committee hearing entitled “Interrupted gambling? Who wins and loses when short sellers, social media and retail investors collide”, you can watch it online at 12.00 ET. USA on February 18.