The GameStop Bubble and the Capitol Hill Show
On January 1, the stock price of the bricks-and-mortar video game retailer GameStop (stock symbol: GME) was idling at less than $19 a share. Then the stock swelled into a giant bubble, becoming for a time the most traded stock on the planet and reaching, on January 28, an interday high of $483, an increase of more than 2,500 percent. Then the stock fell back to earth again, closing at a mere $40 on February 19.
Along the way, the GameStop parabola received enormous attention, as accusations flew about market manipulation. And so it was inevitable that Congress would get involved.
That involvement came big time on February 18, when the House Financial Services Committee, chaired by Rep. Maxine Waters (D-CA), convened a hearing, given a showy title in advance: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.”