- Wall Street is scrambling as day traders on Reddit sent GameStop’s shares skyrocketing.
- Institutional investors, state regulators, and lawmakers are calling for the Securities and Exchange Commission to take action.
- Securities lawyers and former regulators, however, think it’s unlikely that the SEC can implement major changes.
Calls for federal regulators to take action on the ongoing GameStop saga are mounting.
Wall Street Bets, a Reddit forum of now more than 6 million day traders, collectively drove up the gaming retail company’s stocks. Shares were priced at below $5 in late 2020 skyrocketed over the last three weeks, hitting $450 per share on Thursday morning. The moves sent some prominent hedge funds that had shorted the stock scrambling and incurring huge losses.
Then stock prices plunged on Thursday as much as 60% after Robinhood and other brokerage platforms restricted trading of GameStop’s shares and other popular securities like AMC, sparking critique from figures like Rep. Alexandria Ocasio-Cortez of New York. Robinhood then announced that it would allow “limited buys” of these securities starting the next day.
