- 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
Today's Top Deals
- Amazon’s craziest deal is about to end: Alexa speaker and an LED smart bulb for $15
- People are infatuated with Amazon’s new $20 smart gadget
- Amazon’s hottest smart home gadget is down to $27, beating Black Friday’s price
Trending Right Now:
- A Mars orbiter just detected something it’s never seen before
- This tasty sauce sold across multiple US states is now recalled
- 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.