GameStop (GME) shares saw another dip on Thursday as the key players in the stock surge are set to be called to a Congressional hearing. Rep. Maxine Waters told Bloomberg that she was working on a list of names that she wanted to appear before the House Financial Services Committee.
GME stock closed at the $57.40 level after traders got spooked by the news that the SEC was scanning social media for the culprits of the stock pump. There were also further losses for AMC Entertainment (AMC) with the stock down 20 per cent at $7.
Redditor Gill to be called for testimony
The Reddit trader at the heart of the GameStop drama could appear before US politicians to testify on his role. The move would see Keith Gill rubbing shoulders with GameStop and Robinhood executives.
After scheduling a hearing for February 16, the US Financial Services Committee Chairwoman Maxine Waters said that she wanted the group to appear for testimony.
Waters added that she wanted to see Melvin Capital and Citadel hedge funds appearing. The eclectic bunch would see a bedroom trader and app-based broker joining Wall Street investors for what could be entertaining viewing.
Keith Gill, who was active on the WallStreetBets forum and goes by the name of Roaring Kitty on YouTube, is seen as one of the key investors in GameStop. His analysis drew other retail investors into the stock, which culminated with an 8,000 per cent gain over the last six months.
Bank of America sees drop in GME activity
A research analyst at Bank of America has written in a research note that GameStop is starting to see less activity on message boards and trading volumes. Curtis Nagle suggested that the drop in interest could see the stock heading back to lower levels.
Nagle’s investment research said that GameStop's expensive valuation would make sense with annual cash flows of around $2bn, rather than the $65m the company produced in 2020.
The action from the SEC and Congress will have scared investors off the Reddit boards, while much of the WallStreetBets community was moving into silver investments. This could see activity cool in GameStop and the share prices of these stocks will go back to news and fundamentals.
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