The GameStop and Reddit saga is now the subject of a federal investigation

[Yoni Heisler]

• The Justice Department is looking into potential market manipulation regarding the rapid rise of GameStop's stock price last month.
• Over the course of a few weeks, Redditors on the WallStreetBets subreddit mobilized and drove the price of GameStop shares up more than 5,000%.
• Redditors took advantage of the fact that hedge funds had unusually large short positions on GameStop shares.

The wild saga that saw Redditors pump up GameStop shares by more than 5,000% over the course of a few weeks is now the subject of a federal investigation, according to a new report from The Wall Street Journal.

News of the investigation comes a few days before representatives from Robinhood, Melvin Capital, and Citadel are set to appear before Congress. Melvin Capital, if you recall, was the billion-dollar hedge fund that almost went bankrupt due to its extreme short position on GameStop. Citadel, meanwhile, helped bail Melvin Capital out with a cash infusion totaling more than $1 billion. Another layer of complexity is that Robin Hood -- which briefly prevented investors from buying GameStop shares as the stock soared -- has an ongoing business relationship with Citadel.

Today's Top Deal





Amazon shoppers are obsessed with these best-selling Powecom KN95 masks


Price: $25.99
Buy Now

Continue reading...

Today's Top Deals

1. People are infatuated with Amazon’s new $20 smart gadget
2. Amazon’s craziest deal is about to end: Alexa speaker and an LED smart bulb for $15
3. Today’s best deals: $15 Alexa speaker, $361 off Dell XPS laptop, $20 sneakers, $35 Wi-Fi extender, KN95 masks, more

Trending Right Now:

1. There’s an important new stimulus check development that you need to know about
2. This calculator tells you how big your next stimulus check will be
3. Third stimulus check: Read this before your file your 2020 tax return

The GameStop and Reddit saga is now the subject of a federal investigation originally appeared on BGR.com on Fri, 12 Feb 2021 at 20:10:45 EDT. Please see our terms for use of feeds.

Via BRG - Boy Genius Report