GameStop Hearing Live Updates: Keith Gill and CEOs of Robinhood …

Keith Gill

GameStop Hearing Live Updates: Keith Gill and CEOs of Robinhood …

The House Financial Services Committee holds a hearing to question the executives of Robinhood Markets Inc., Reddit and other firms that played a role in the …

GameStop Hearing Live Updates: Keith Gill and CEOs of Robinhood, Reddit Testify – WSJ.com

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LIVE COVERAGEView highlights onlyFilterLawmakers Examine GameStop Trading Frenzy

Lawmakers on the House Financial Services Committee questioned top executives of Robinhood Markets Inc. and other companies that played a role in the GameStop Corp. saga during a hearing that put a spotlight on the pitfalls individual investors face in the age of social media and smartphone trading apps.

The stock of videogame retailer shares soared last month to above $480, from $18.84 at the start of 2021. The surge was fueled in part by an army of bullish individual traders exhorting one another on platforms such as Reddit to buy shares and options and squeeze the hedge funds shorting the stock.

The episode has led to questions about the market’s integrity and set off . Prosecutors have subpoenaed information from brokers such as Robinhood, the that many individual investors used to trade GameStop and other shares.

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

Read prepared testimony from the hearing: | | | | |

43 minutes agoHearing Touches on Bearish Bets on TeslaBy A Tesla vehicle and charging station outside of the Tesla factory in Fremont, Calif.Jeff Chiu/Associated Press

The hearing briefly touched on the topic of Tesla Inc. shares, with Melvin Capital’s Gabe Plotkin saying that his firm previously held a bearish position on Tesla years ago in response to a lawmaker’s question.

Tesla and GameStop Corp. have both been popular bearish bets among investors, and the tremendous run-up in the stock 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 ascent in 2020. GameStop shares have gained more than 130%.

51 minutes agoDemocrats Embrace Financial Inclusion, but Wary of Free TradingBy

Congressional Democrats typically favor financial inclusion, including easier and fairer access to housing finance for individuals and loans for small business. But Robinhood’s free trading app appears to be a step too far for some of them.

That’s because commission-free trading is enabled by payment for order flow, which involves online brokers like Robinhood sending orders for execution to market makers such as Citadel Securities. Citadel CEO Ken Griffin said Thursday that the system has been “very important to the democratization of finance. It has allowed the American retail investor to have the lowest execution cost they’ve ever had.”

Some Democratic lawmakers weren’t assuaged by that explanation.

“When you’re not paying for it, it’s not free,” said Rep. Brad Sherman (D., Calif.).

Mr. Sherman suggested that Robinhood clients would pay instead through inferior trade execution, since Robinhood sells their orders to big, well-informed traders such as Citadel, a claim Mr. Griffin rebutted.

54 minutes agoKeith Gill Talks, GameStop Shares JumpBy Keith Gill testifies during the virtual hearing on Thursday.House Committee on Financial Services

Shares of GameStop Corp. briefly surged Thursday around the time that Keith Gill began speaking at the House Financial Services Committee’s hearing.

Shares of the video-game retailer were trading in a narrow range around $44 before and after the hearing began at noon. They then moved up sharply, with shares climbing well above $48 after Mr. Gill began his opening remarks.

Shares have since fallen and were recently trading around $45.

Mr. Gill, the once-anonymous trader who goes by the alias “DeepF—ingValue” on Reddit, has become a legend of sorts to the WallStreetBets online community. Mr. Gill was one of the earliest individual investors to place bullish bets on GameStop, yielding him big gains when the company’s share price surged in January.

On Thursday, Mr. Gill stressed in testimony that he isn't a professional investor and doesn't provide personalized investment advice.

Earlier this month, of his GameStop holdings on Reddit. This week, WallStreetBets users have offered their support, with one user, u/Brunchtime27 posting Wednesday an “Ode to DeepF—ingValue.”

“I love you man,” the user said. “Your written testimony is spot-on and I truly wish you the best in everything.”

1 hour agoGameStop Bets Take Center Stage in Record Year for Options TradingBy A GameStop store in Des Plaines, Ill., last year.Nam Y. Huh/Associated Press

Vlad Tenev, Robinhood Markets Inc.’s chief executive, said that 13% of its customers make an options trade on a monthly basis.

Options trading has ended up at the center of the GameStop Corp. mania, as many investors turned to bullish option bets tied to the retailer in an effort to profit from the stock’s surging price.

Such contracts allow investors to buy or sell shares at specific prices at some point in the future. Options also allow investors to put down a small sum in exchange for a potentially outsize return if their wagers prove correct.

GameStop options volumes surged to levels not seen previously, and options trading across the entire market has hit highs this year. Some traders said that at times the options activity tied to GameStop was influencing the stock’s wild moves. Keith Gill, who goes by “Roaring Kitty” on YouTube, has held GameStop call options.

Options trading has boomed over the past year as millions of new traders flocked to Robinhood and other brokerages, eager to profit from the market’s extreme gyrations. Activity this year is on track to surpass last year’s record volumes. An average of about 43 million contracts have changed hands daily 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 options bets. They have imposed fewer hurdles on new traders to access options compared to other brokerages, The Mr. Tenev said in his written testimony that the company has added “more safeguards and information” to its app.

1 hour agoWaters Says This Isn't 'Political Theater'By

Rep. Maxine Waters (D., Calif.) disputed GOP Michigan Rep. Bill Huizenga, who called Thursday's hearing “political theater.”

Ms. Water said that the event was important oversight work.

“I appreciate all of the members who are participating today. This is not political theater at all. This is serious oversight responsibility and members are reminded not to impune the motive of other members,” Ms. Waters, who chairs the committee said.

Both Ms. Waters and Rep. Patrick McHenry (R., N.C.), the top Republican on the committee, have been supportive of holding the panel. Though Mr. McHenry told reporters ahead of the hearing he expected the two parties to differ on approaches following fact finding work.

About this pageGameStop Hearing Live Updates: Keith Gill and CEOs of Robinhood, Reddit TestifyLast Updated: Feb 18, 2021 at 2:36 pm ETThe House Financial Services Committee holds a hearing to question the executives of Robinhood Markets Inc., Reddit and other firms that played a role in the GameStop stock drama.Share this pageEnglish EditionBack to Top «

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