On Thursday, the House Financial Services Committee will hold a hearing on the recent GameStop stock trading frenzy. The committee said in a statement that the hearing will focus on “the role of market manipulation in stoking online speculation.” GameStop shares have soared in recent weeks as small investors, using social media platforms like Reddit, have bought up the stock to drive up its price and force hedge funds to abandon bearish bets against the struggling retailer.
The hearing will feature testimony from Robinhood CEO Vlad Tenev, Reddit CEO Steve Huffman, and Keith Gill, a popular online investor known as “Roaring Kitty” who has become the public face of the GameStop rally. The committee is also expected to hear from traditional Wall Street firms like Melvin Capital, which was one of the hedge funds that lost big on its bet against GameStop. It remains to be seen what, if any, action the committee will take as a result of the hearing. But with millions of Americans now invested in GameStop and other so-called “meme stocks,” the hearing is likely to be closely watched by Main Street and Wall Street alike.
What is GameStop and what do they do?
GameStop is a video game and entertainment software retailer, with more than 2,000 stores across the United States. The company was founded in 1994 and went public in 2002. GameStop has been struggling in recent years, as the rise of digital downloads and streaming services has made physical copies of games and movies less popular. In 2019, the company announced it would close 150 stores worldwide.
What is the recent GameStop stock trading frenzy?
In recent weeks, GameStop shares have soared as small investors, using social media platforms like Reddit, have bought up the stock to drive up its price and force hedge funds to abandon bearish bets against the struggling retailer. The rally has been dubbed a “short squeeze,” as the investors buying GameStop stock are betting that the price will continue to rise, driving up the cost of borrowing the shares and forcing the hedge funds to abandon their bets.
What is the House Financial Services Committee?
The House Financial Services Committee is a committee of the United States House of Representatives. The committee is charged with overseeing the financial services industry, including banks, insurance companies, and securities firms. The committee also has jurisdiction over consumer protection, housing, and monetary policy.
What will the hearing focus on?
The House Financial Services Committee said in a statement that the hearing will focus on “the role of market manipulation in stoking online speculation.” The hearing will feature testimony from Robinhood CEO Vlad Tenev, Reddit CEO Steve Huffman, and Keith Gill, a popular online investor known as “Roaring Kitty” who has become the public face of the GameStop rally. The committee is also expected to hear from traditional Wall Street firms like Melvin Capital, which was one of the hedge funds that lost big on its bet against GameStop.
What is the committee expected to do as a result of the hearing?
It remains to be seen what, if any, action the committee will take as a result of the hearing. But with millions of Americans now invested in GameStop and other so-called “meme stocks,” the hearing is likely to be closely watched by Main Street and Wall Street alike.