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On February 18th, the House Financial Services Committee will hold a virtual hearing to look into how GameStop's shares shot up in value after a bunch of Reddit day traders banded together. Committee Chairwoman Maxine Waters has released the list of witnesses for the hearing, and it includes Robinhood CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, as well as Redditor and YouTube streamer Keith Gill, who's also known as Roaring Kitty.
A New York Times report details how Gill played a central role in GameStop's sudden increase in market value. According to the report, he has been tweeting and making videos about the retailer throughout 2020 after making a $53,000 investment in the company. A number of Reddit traders who followed his videos and posts rallied behind him, causing a stock market frenzy that led to huge losses for the hedge funds that bet against the retailer and expected its stock price to tumble. As a result, Gill's original investment now has a value of $48 million.
The traders involved used the commission-free app Robinhood, which then temporarily restricted users from trading GameStop and certain other stocks due to lack of money on hand. Robinhood started allowing “limited buys” of the restricted stocks a few days later, but not before it was hit with a class action lawsuit accusing it of depriving its customers of the ability to use its service in an effort “to manipulate the market for the benefit of people and financial intuitions.”
The Senate Committee on Banking previously announced that it will hold a hearing "on the current state of the stock market" after what happened. As for the House Financial Services Committee hearing entitled "Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide," you'll be to watch it online at 12PM ET on February 18th.