Robinhood Markets, GameStop Corp. and hedge funds are all on the wish list that Maxine Waters, chairman of the House Financial Services Committee, is gathering for a hearing that will delve into the Reddit-powered stock trading that has shocked Wall Street and lawmakers.
“I’m trying to get everyone who has a role to play,” Waters said in an interview, without naming specific executives she wants to ask to testify. ‘I want Reddit there. I want Robinhood there. I even want GameStop there. And I want some of the hedge funds there. “
The California Democrat cited Citadel, the hedge fund founded by billionaire Ken Griffin Melvin Capital, which lost 53% in January after being bludgeoned by a GameStop short squeeze orchestrated by an army of private investors posting on Reddit message boards.
Waters also indicated that she could ask Keith Gill, a Reddit contributor credited with inspiring GameStop’s remarkable rally, to appear. On YouTube, Gill uses the screen name ‘Roaring Kitty’.
“Young man, I think his name is ‘Gill’, that’s what started this all, I’ve got him on my list,” said Waters.
The February 18 hearing offers lawmakers a chance to grill Wall Street titans and ask about possible reforms that might be needed to tame a market that has, at least temporarily, been disconnected from economic realities. GameStop, which isn’t expected to turn a profit for years, has had a wild ride, rising to $ 347.51 a share last month, before closing at $ 92.41 in New York, which trades Wednesday.
Retail investors have fueled the rise, but some are now likely hit by the losses, worrying they are taking risks they don’t understand and can’t afford.
Robinhood, Citadel and Melvin all star in the saga. Robinhood is where most retail investors bet their bullish on GameStop, before the brokerage outraged them last week by forbidding its clients from buying new shares in the video game chain.
In addition to its hedge fund, Griffin also controls Citadel Securities, a giant marketplace that pays Robinhood for the right to conduct its clients’ equity transactions. Griffin and his partners invested $ 2 billion in Melvin as it struggled with its losses on GameStop.
(An earlier version corrected the spelling of Melvin Capital)