Live updates: GameStop trading frenzy returns to spotlight as major players testify in House hearing

The inventory market just isn’t clear, making it troublesome for even specialists and authorities to clarify what was occurring throughout the GameStop inventory growth. In the absence of laborious information, theories started circulating about who was actually driving up the inventory costs and why on-line brokerage apps such as Robinhood determined to restrict trading when shares had been surging.

Here are a number of the theories House hearing witnesses hope to debunk once they take the stage:

A number of days into the GameStop surge, Robinhood took the stunning step of halting the power for customers to purchase the inventory. At the time, the corporate didn’t totally clarify this transfer, main buyers on social media to decry the coverage as unfair and speculate that the corporate had bowed to stress from highly effective Wall Street corporations who had been getting crushed by the rising inventory.

Robinhood’s Tenev plans to explain the corporate’s causes for halting trades throughout Thursday’s hearing and name on Congress to consider changes to the laws that might stop an identical downside in the long run. Citadel founder Ken Griffin will strongly deny that his agency had any function in the choice to halt trading.

The anonymity of Reddit’s customers has led to some hypothesis about who was responsible for sparking the stock-buying frenzy. Financial regulators have mentioned they’re combing by social media posts to decide whether or not skilled buyers used on-line anonymity to stoke demand for shares.

Keith Gill, the Reddit person known as to testify about his on-line promotion of GameStop inventory, was till just lately a registered dealer and worker of MassMutual, inflicting hypothesis about whether or not he was pumping the inventory in the curiosity of his agency or purchasers.

In his testimony, Gill plans to say that he posted to social media solely as a person investor. Reddit CEO Steve Huffman additionally plans to element steps the positioning has taken to vet the neighborhood for unscrupulous actors.

The occasions of the final month drew consideration to Robinhood’s enterprise mannequin. The firm fees giant funding corporations known as “market makers” charges to entry real-time details about which shares its customers are shopping for and promoting — a enterprise known as “payment for order flow.”

In his ready remarks, Tenev plans to say that Robinhood’s “’payment for order flow’ relationships are with market-makers and not with hedge funds.”