White House Press Secretary Says The US Treasury Department Is Monitoring GameStop Stock Frenzy
According to the White House Press Secretary, Jen Psaki, Treasury Secretary Janet Yellen and Joe Biden’s economic team are monitoring stock market activity around GameStop. The announcement comes after a surge in GameStop Corp. over the past week resulted in a demand for action by Democratic Senator Elizabeth Warren.
“For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price,” Warren said. “It’s long past time for the SEC and other financial regulators to wake up and do their jobs — and with a new administration and Democrats running Congress, I intend to make sure they do.”
On Wednesday, shares in GameStop more than doubled after millions of amateur traders, egged on by Reddit pages like Wall Street Bets, began piling into trades around several companies, pushing the company’s stock prices skyward. In the past week, the video game, consumer electronics, and gaming merchandise retailer added nearly $24 billion to its market value.
The unusual frenzy around GameStop stock has prompted Warren to compel financial regulators to clamp down on Wall Street. Shares in the company have risen over 1,700 percent since December, and just this week, the market value rose over $10 billion. As a result, hedge funds that held short positions in the retailer, like Melvin Capital, have closed out their positions and lost billions of dollars.
Despite calls for action, Federal Reserve Chairman Jerome Powell, stated at a Wednesday afternoon news conference, “I don’t want to comment on a particular company or day’s market activity or things like that. It’s just not something really that I would typically comment on.”
Representative Alexandria Ocasio-Cortez, a New York Democrat, said in a tweet that it was ironic that Wall Street was complaining about small time investors bursting onto the scene. “Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino,” she wrote.
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