Courtesy of Pam Martens
(Left to right, top row) Keith Gill, Who Hawked Shares of GameStop on Reddit and YouTube; Citadel’s Ken Griffin; Gabe Plotkin of Melvin Capital, a Hedge Fund Shorting Shares of GameStop; (Left to right, bottom row) Steve Huffman, Co-Founder and CEO of Reddit; Vlad Tenev, CEO of Robinhood.
By Pam Martens and Russ Martens
The most striking revelations in yesterday’s House Financial Services Committee hearing on the wild trading action in New York Stock Exchange-listed shares of GameStop came when Congresswoman Cindy Axne of Iowa questioned Vlad Tenev, the CEO of Robinhood, the trading app being increasingly used by young people to trade stocks and options on their mobile phones.
GameStop is the brick-and-mortar video game retailer whose stock soared from $18.84 on December 31 of last year to an intraday high of $483 on January 28 – an unprecedented run of 2,465 percent in four weeks by a struggling retail outlet. Following the spectacular run, GameStop’s share price then quickly plunged back to earth, making its stock chart look like something you would see from a boiler room operation rather than a New York Stock Exchange-listed stock. GameStop’s closing price yesterday was $40.69.
The exchange between Axne and Tenev opened a window into a sick business model on Wall Street that is pumping out billionaires like Citadel’s Ken Griffin while seducing young people with the gamification of trading.
Axne began the questioning of Tenev by stating that her nephew and two of his friends had stayed up to four in the morning to try to get a “piece of the action” in the highflying meme stocks like GameStop and the theatre chain, AMC. This exchange then followed:
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