Elizabeth Warren speaks out on soaring GameStop stocks

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His. Elizabeth warrenElizabeth Warren The Hill’s Morning Report – Biden pleads for legislative patience, urgent action amid crisis Financial firms brace for Biden consumer agency chief Tim Ryan, says he’s’ seriously considering ” to report to the Senate headquarters in Portman PLUS (D-Mass.) Wednesday took to Twitter to comment on GameStop’s recent stock market surge spurred by amateur investors, with Warren criticizing hedge funds and high net worth investors “appalled” by GameStop transactions.

GameStop surged again on Wednesday after a series of back-and-forths, trading at around $ 337 per share when it was briefly halted shortly after 1 p.m. ET, according to CNBC. This was an increase of about 128% from the market close on Tuesday, giving the company a market cap of around $ 23 billion on Wednesday.

The swings were largely organized by amateur investors on forums such as Reddit and have forced trading off on several occasions, confusing traditional investors and short sellers betting on falling stocks.

Warren responded to recent developments on Twitter by writing, “With stocks soaring as millions of people are out of work and struggling to pay their bills, it’s not news that the stock market doesn’t reflect our real economy.

Warren, who has repeatedly criticized the big banks and Wall Street companies, went on to say in a follow-up tweet: “For years the same hedge funds, private equity firms and high net worth investors appalled by transactions GameStop have treated the stock market as their own casino while everyone is paying the price. ”

“It is high time for the SEC and other financial regulators to wake up and do their job,” continued the Democratic senator. “With a new administration and Democrats running Congress, I intend to make sure they do.”

The Texas-based video game company saw an increase in extended trading on Tuesday after Tesla CEO Elon muskElon Reeve Musk: Should deficits matter more? SpaceX, Amazon Argue Over Satellite Plans: Report WhatsApp Delays Controversial Privacy Update READ MORE tweeted the link to the Reddit board where much of the discussion of GameStop stocks among investors took place.

Deutsche Bank strategist Jim Reid told CNBC that GameStop was the most traded stock in the market in terms of value on Tuesday.

The changes have led to an increase in short selling, in which investors borrow shares of a stock and sell them at a certain price in the hope that the stock’s value will decline. The short seller then buys an identical amount of shares to return to the investor they borrowed from and ideally pockets the difference between the money made by selling the original shares at a higher price and the money spent on buy them when the price has dropped.

TD Ameritrade said Wednesday it has put restrictions in place on certain transactions involving GameStop “in the interest of mitigating risk to our company and our customers,” and Charles Schwab also tightened trading restrictions around certain stocks.

While investors on Reddit and other platforms have defended their stocks, claiming they are creating a new group of investors in the stock market, mainstream investors have opposed the sudden changes.

Michael Burry, hedge fund manager, who reported holding 1.7 million GameStop shares at the end of September, said in a tweet since deleted that the hike was “unnatural, senseless and dangerous,” according to CNBC.

Sylvan Lane contributed.



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