The U.S. House Financial Services Committee will hold a virtual hearing on February 19 as part of its investigation into the coordinated effort by Reddit’s stock-trading community to drive up the price of GameStop stocks as a big middle finger to hedge fund managers.
The witness list includes some of the key players involved in the GameStonks saga, including Robinhood co-CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, Melvin Capital CEO Gabriel Plotkin, and Keith Gill (aka Roaring Kitty), a Reddit user and YouTuber who reportedly helped kick off the buying frenzy, per a Friday press release from House Financial Services Committee Chair Rep. Maxine Waters. Additional witnesses may still be named, the press release states.
Last month, small-time investors on the WallStreetBets subreddit banded together to buy up GameStop stock in part to screw over hedge funds that made significant bets against the beleaguered game retailer. Their plan worked, and the value of GameStop’s stock skyrocketed by at least 500% while short sellers like Melvin bled out billions in estimated losses. According to the New York Times, Gill played a central role in getting the campaign off the ground by frequently tweeting and making videos about his investment in GameStop stock. At one point, his original investment of $US53,000 ($68,338) in 2019 was reportedly worth roughly $US48 ($62) million.
Gill and his fellow Reddit users flocked to the free online trading platform Robinhood to buy up GameStop stock before turning their sights onto other floundering companies favoured by WallStreetBets. Robinhood is staring down several lawsuits and accusations of stock market manipulation after it abruptly blocked users from buying so-called “YOLO stocks” during the height of the social media-fuelled stock market frenzy.
In January, Waters said the House hearing will “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.”
The Senate Committee on Banking has also announced plans to hold a hearing “on the current state of the stock market” in the wake of the GameStonks saga. You can catch the House hearing live on its website beginning at 4 a.m. AEDT on February 19.