The CEOs of Robinhood, Citadel, Melvin Capital and Reddit will testify at a U.S. House Committee on Financial Services hearing this week relating to issues around the recent frenzied trading of stocks like GameStop.
- The virtual hearing on Feb. 18 is set to investigate how retail trading pushed the stock from trading below $20 at the beginning of January to around $340 at the end of the month, according to a New York Post report Saturday.
- In particular, Reddit's online trading community r/WallStreetBets helped pump share prices for GameStop and other companies in a bid to punish short sellers.
- Amid the surge, trading app Robinhood limited the ability of traders to buy GameStop and other stocks targeted by WallStreetBets.
- Rep. Maxine Waters (D-Calif.), who will chair the hearing, said previously "I am concerned about whether or not Robinhood restricted the trading because there was collusion between Robinhood and some of the hedge funds that were involved with this.”
- Hedge fund Citadel is appearing because its independent securities arm has a business relationship with Robinhood, while Melvin Capital had to close its GameStop short positions due the the price rise.
- The hearing will be attended by Citadel CEO Ken Griffin, Robinhood CEO Vlad Tenev, Melvin Capital Management CEO Gabriel Plotkin, Reddit co-founder Steve Huffman and Reddit user Keith Gill.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.