Ebene News – United States – GameStop Hearing Live Updates: Keith Gill and Robinhood CEOs, Reddit testify – WSJcom

Lawmakers on the House Financial Services Committee questioned senior executives at Robinhood Markets Inc and other companies who played a role in GameStop Corp saga in a hearing highlighting the pitfalls facing individual investors in the age of social media and smartphone trading apps

Stocks of video game retailers climbed to over $ 480 last month from $ 1884 in early 2021 The push was fueled in part by an army of bullish individual traders urging each other others on platforms like Reddit to buy stocks and options and urge hedge funds to bypass stocks

This episode raised questions about market integrity and triggered federal polls over possible market manipulation Prosecutors have subpoenaed information to brokers such as Robinhood, the popular online brokerage that many individual investors use to trade GameStop and other actions

Ken Griffin of Chicago hedge fund Citadel LLC and market maker Citadel Securities; Vlad Tenev, co-founder of Robinhood; Keith Gill, the once anonymous trader who uses the online alias “Roaring Kitty”, and others testify

Read prepared testimony from the hearing: Ken Griffin | Keith Gill | Gabe Plotkin | Vlad Tenev | Steve Huffman | Jennifer Schulp

Representative Jim Himes (D, Conn) cited Salvador Vergara’s business losses during Thursday’s congressional hearing The Wall Street Journal reported that Mr. Vergara was so excited about GameStop Corp stocks that he took out a $ 20,000 personal loan and used it to buy stocks He now faces big losses as the stock has plunged

Many individual investors have said they’ve stacked on GameStop stocks to watch professional investors deal with their losses But Mr Vergara’s losses highlight the difficulty in determining the winners and losers of the GameStop mania All investors individuals have not made big gains and not all institutional investors have suffered losses

The audience briefly touched on the topic of Tesla Inc stocks, with Gabe Plotkin of Melvin Capital saying his company previously held a bearish position on Tesla years ago in response to a question from a lawmaker

Tesla and GameStop Corp have both been popular bearish bets among investors, and the stock’s formidable surge has burned their short sellers The battle between bullish and bearish investors on both stocks has spilled over into social media

Tesla shares have gained around 11% this year after a meteoric rise in 2020 GameStop shares have gained over 130%

Democrats in Congress generally push for financial inclusion, including easier and fairer access to housing finance for individuals and loans for small businesses But Robinhood’s free trading app appears to be a step too far for some of them

This is because commission-free trading is enabled by order flow payment, which means online brokers like Robinhood send orders for execution to market makers like Citadel Securities Citadel CEO Ken Griffin said on Thursday that the system was “very important to the democratization of finance This has allowed the US retail investor to have the lowest cost of execution he has ever had”

Mr. Sherman suggested that Robinhood clients would instead pay with inferior trade execution, as Robinhood sells their orders to large, knowledgeable traders such as Citadel, a claim that Mr. Griffin refuted

GameStop Corp shares rose briefly on Thursday around the time Keith Gill began speaking at the House Financial Services Committee hearing

Shares of the video game retailer were trading in a narrow range of around $ 44 before and after the hearing began at noon They then rose sharply, with stocks climbing well above $ 48 after M Gill began his opening speech

Mr. Gill, the once anonymous trader who calls himself “DeepF — ingValue” on Reddit, has become something of a legend for the online community WallStreetBets Mr. Gill was one of the first individual investors to place bullish bets on GameStop, which brought it big gains when the company’s stock price jumped in January

Thursday, M Gill emphasized in his testimony that he is not a professional investor and does not provide personalized investment advice

Earlier this month, M Gill announced that he is suspending his regular updates of his GameStop holdings on Reddit This week, WallStreetBets users have offered their support, with one user, u / Brunchtime27 posting an “Ode to DeepF — ingValue” on Wednesday

“I love you man” user said “Your written testimonial is perfect and I really wish you the best in everything”

Vlad Tenev, Robinhood Markets Inc’s CEO, said 13% of its clients trade options on a monthly basis

Options trading has found itself at the center of GameStop Corp mania, as many investors have turned to bullish option bets linked to the retailer in an attempt to profit from the surge in the price of the action

Such contracts allow investors to buy or sell stocks at specific prices at some point in the future.Options also allow investors to deposit a small amount in exchange for a potentially disproportionate return if their bets turn out to be correct

GameStop options volumes have reached levels never seen before, and options trading across the market has hit record highs this year Some traders have said that sometimes options activity related to GameStop was influencing the wild moves of the action Keith Gill, who calls himself “Roaring Kitty” on YouTube, organized the GameStop calling options

Options trading has exploded over the past year as millions of new traders flocked to Robinhood and other brokerages eager to take advantage of extreme market swings This year’s activity is on track to surpass last year’s record volumes An average of about 43 million contracts changed hands every day this year, up about 47% from last year, according to Options Clearing Corp. data

Robinhood has been criticized for making it too easy for novice investors to make risky option bets They have placed fewer barriers for new traders to access options compared to other brokers, the Wall Street Journal reported , M Tenev said in his written testimony that the company added “more guarantees and information” to its application

Keith Gill

Ebene News – United States – GameStop Hearing Live Updates: Keith Gill and Robinhood CEOs, Reddit testify – WSJcom

Source: https://www.wsj.com/livecoverage/gamestop-stock-hearing-keith-gill-reddit-robinhood