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Actors in the GameStop incident testified in the US House of Representatives.

The House Financial Services Committee, a session titled “Does Gambling Stop? Winners and Losers When Short Sellers, Social Media, and Individual Investors Collide” Regarding the Rapid Rise in GameStop Shares and the restriction on transactions by Robinhood, one of the stock trading platforms, in late January.

Robinhood Executive Manager Vlad Tenev, in his speech at the videoconferencing session, stated that they believe that the financial system should be built to work for everyone, not just a few, and stated that Robinhood’s mission is “democratize the financial system”.

“I’m sorry and sorry”

Tenev claimed that many brokerages saw a “huge” increase in some share prices in late January, and recalled that an unprecedented event occurred on January 28, so limited transactions were allowed restricting certain stocks.

Emphasizing that Robinhood does not impose restrictions on transactions to help hedge funds, Tenev claimed that they have imposed a restriction on transactions on some stocks to meet their increasing regulatory deposit requirements.

“What happened at the end of the day is unacceptable to us despite the unprecedented market conditions in January. I am sorry and sorry. Please know that we are doing everything we can to make sure this does not happen again,” Tenev said . saying.

WE HAVE NO ROLE IN THE DECISION TO LIMIT TRANSACTIONS “

Citadel Securities Senior Manager Kenneth Griffin said individual US investors play an important role in the capital markets.

Noting that Citadel Securities played a significant role in meeting the needs of individual investors during the week of January 24, Griffin said: “We have no role in Robinhood’s decision to limit trading on GameStop or similar stocks. I learned of Robinhood’s decision to limit transactions after it was first made public. ” speak.

Melvin Capital CEO Gabriel Plotkin also claimed that many investors suffered losses due to the unprecedented event.

“I want to clarify that Melvin Capital has absolutely no role in the decisions of the trading platform. Melvin Capital closed all its positions on GameStop days before the platforms put these restrictions,” Plotkin said of Robinhood’s trading limitations on some Actions. used expressions.

REDDIT ANALYSIS TO WALLSTREETBETS

Reddit co-founder Steve Huffman explained that the WallStreetBets forum, which is hosted by investors, is one of the many finance and investing related communities on Reddit.

Huffman noted that from the time of sharp spikes in stocks, they analyzed whether robots, foreigners or other bad actors, called “bots,” were effective on the WallStreetBets forum, but found no such situation.

Keith Gill, a Reddit user and one of the individual investors who bought GameStop stock, said that his investment in GameStop stock gained value and he felt “very lucky” about it.

Claiming that the idea that it affects the market by encouraging investors in GameStop shares is “illogical,” Gill argued that sharing on social media does not cause billions of dollars to be invested in GameStop shares.

GAMESTOP EVENT

The conflict between large and small investors in the US stock market came to the fore with GameStop stock trading in the last week of January.

GameStop, the US video game seller whose market value fell due to economic distress, was among the stocks that were mostly “shorted” at the end of last year, meaning investors are expected to decline even more.

Melvin Capital, one of the mutual funds, tried to make money from GameStop shares, which were around $ 17-18 last year, using the short sale method, but the group of investors, who met at the social media platform Reddit, realized this and started buying shares in an organized manner.

While amateur investors, organized through the forum called WallStreetBets, increased their price by buying shares of GameStop, the share price, which was around $ 17-18, surpassed $ 400.

Shares of GameStop, which Wall Street predicts the value of large investment companies will decline further, gained about 1,700 percent last month on large purchases by small investors, causing losses.

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