Robinhood, hedge funds, and retail investors testify to Congress in GameStop affair
GameStop’s course has lost again by 90%, but the affair is entering the next round in the parliamentary finance committee.
Several top executives from the companies involved in the affair over the shares of the video game retailer GameStop and also some participating small investors who had agreed to jointly buy the security via the social network are now to testify before the finance committee of the American parliament.
As a Reuters report stating that managing the trading platform Robin Hood, the investment firm Capital Melvin and the hedge fund Citadel are expected for February 18 parliamentary hearing requested
According to Bloomberg , Citadel founder Ken Griffin and Robinhood CEO Vlad Tenev have already been confirmed , but it’s unclear whether Melvin founder Gabriel Plotkin or another member of the hedge fund’s management team will appear.
The hearing, which will take place in virtual form due to the corona crisis, deals with the developments around the GameStop share, which were largely triggered by the aforementioned investment companies and hedge funds, the Robinhood trading platform and Reddit’s small investors. After the latter had driven the security to disproportionate heights, Melvin and Citadel suffered massive losses, whereupon Robinhood ceased trading in GameStop shares . Some politicians see possible market manipulation in this step, which is why the trading platform was immediately criticized .
This criticism has been reinforced by the fact that Robinhood has financial ties to Melvin and Citadel
The media and observers accordingly interpreted the trading ban as a kowtowing of high finance to the detriment of small investors. CEO Tenev countered, however, that the capital requirements for trading the share became too high for his company due to its dramatic price increase, which is supposed to be the real reason for the stop.
Although the restrictions were later lifted , the GME’s rate has now crashed from its temporary high of $ 469.49 on January 28 to just $ 49.50.