Gamestop rally committee: Youtuber has to testify about price turbulence

Saturday February 13th 2021

Gamestop Rally Committee
Youtuber has to testify about price turbulence

In the USA, the supervisory authorities are investigating the turmoil on the stock exchange around Gamestop: How did the computer game dealer's stock be driven to dizzying heights? Not only hedge fund managers and company bosses have to take a stand.

In addition to hedge fund managers and company bosses, the YouTuber "Roaring Kitty" has to testify to a committee of the US House of Representatives about the turbulence in stocks at the video game retailer Gamestop. The list of witnesses was announced in Washington by the Democratic Congressman Maxine Waters. On it stand among others Keith Gill, who hides behind the pseudonym "Roaring Kitty", the head of the trading platform Robinhood, Vlad Tenev, as well as the heads of the hedge funds Citadel and Melvin. You should testify next Thursday.

Gill gives financial and investment tips on his YouTube channel. He had already recommended buying Gamestop shares in August last year. He is also said to have posted screenshots of his account on Reddit and thus enabled many to understand his Gamestop investment. The rally made the 34-year-old family man a millionaire. According to the Daily Mail, his $ 750,000 investment is now worth $ 46 million.

The Financial Services Committee is investigating how the stocks of Gamestop and other names could be propelled to dizzying heights. With concerted purchases, small investors had forced hedge funds to dissolve bets on the decline in the Gamestop price, which in some cases even got them into a mess and upset the world's stock exchanges. Silver and the crypto currency Ripple have also recently seen violent price movements on the market.

The virtual hearing entitled "Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide" will be streamed live.

The judiciary and the US government are already preoccupied with the controversy. Robinhood and other brokers had temporarily restricted purchases of the video game provider and thus triggered outrage across party lines in the USA. Both houses of Congress have announced hearings on what is going on. The Texas attorney general spoke of signs of collusion between hedge funds and other parties to stave off a threat to their market dominance.

The bets on price losses at Gamestop have cost hedge funds dearly. Since the beginning of the year, their losses add up to 12.5 billion dollars, according to recently published data from data provider Ortex. Some funds had their backs to the wall, including Melvin Capital. The hedge funds Point72 and Citadel had to save their partner from collapse with an injection of billions.