Recently, it seems that a bunch of Redditors on the subreddit WallStreetBets have been actively buying GameStop’s shares. The efforts by the Redditors have managed to drive the share prices up to $4 to a stagger $200, which resulted in some hedge fund managers, who had shorted GameStop’s stocks, losing a ton of money in the process.Unfortunately (or fortunately) for investors, it seems that these activities have since managed to draw the attention of Congress who and the Senate Committee on Banking, who have announced that they will be holding a hearing “on the current state of the stock market”.
According to Sen. Sherrod Brown, who is the incoming committee chairman, “American workers have known for years the Wall Street system is broken – they’ve been paying the price. It’s time for the SEC and Congress to make the economy work for everyone not just Wall Street.”
House, Rep. Maxine Waters, who chairs the House Financial Services Committee also made a statement which reads, “As a first step in reining in these abusive practices, I will convene a hearing to examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”
GameStop’s shares have managed to garner a lot of attention, where some feel that the actions of the Redditors were akin to Wall Street investors who made similar “gambles” in the past, and shouldn’t necessarily be viewed any differently. There are also others, namely hedge fund managers, who are crying foul after losing a ton of money.
Filed in . Read more about Gamestop, Legal and Reddit. Source: techcrunch