Robinhood CEO Vladimir Tenev and Reddit CEO Steve Huffman will testify on Thursday to the U.S. House Committee on Financial Services, in regards to January's sudden surges in GameStop's stock.
Both CEOs were named as witnesses in a February 12 press release announcing the hearing. In addition to them, hedge fund heavies Kenneth C. Griffin (CEO of Citadel) and Gabriel Plotkin (founder of Melvin Capital Management) were also called, as was investor and YouTuber Keith Gill, who rose to prominence under his username on Reddit (u/deepf**kingvalue) because of his high returns-on-investment. Gill is also a known booster of GameStop stocks.
The hearing will be held virtually at 12:00 p.m. ET. The full title is "Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide." It can be viewed on the Financial Services Committee's website or streamed via YouTube below.
The Financial Services Committee will surely examine the impact that mobile trading applications such as Robinhood and social media platforms like Reddit can have on the stock market, as demonstrated by the GameStop fiasco. There will also likely be some discussion of the practice of short-selling, and possibly what factors could have played a role in GameStop's stock coming back down to Earth.
Tenev had been the subject of much public backlash after Robinhood temporarily halted trading on certain so-called "meme stocks," including GameStop. Even politicians like Congresswoman Alexandria Ocasio-Cortez called for Robinhood to allow users to trade freely. Reddit is, of course, home to the "WallStreetBets" subreddit, where amateur retail investors helped campaign for GameStop and other retail stocks to skyrocket "to the moon," as the sub's members say. Melvin Capital was one of the hedge funds that drew ire from the Reddit investors for shorting GameStop in the first place.
As for the House Committee on Financial Services, California Congresswoman Maxine Waters is the committee chair. Waters first called for the investigation in a January 28 statement.
"Addressing that predatory and manipulative conduct [of hedge funds] is the responsibility of lawmakers and securities regulators who are charged with protecting investors and ensuring that our capital markets are fair, orderly, and efficient. As a first step in reining in these abusive practices, I will convene a hearing to examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors," she said.
She also called for accountability when it comes to hedge funds, saying, "We must deal with the hedge funds whose unethical conduct directly led to the recent market volatility and we must examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves while others pay the price."
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
