The CEO of the Robinhood monetary app will testify earlier than a congressional committee later this month, because the backlash over its determination to restrict buying and selling in highly-leveraged shares, comparable to GameStop (GME) – Get Report, continues, in line with a printed report Monday.
Robinhood CEO Vlad Tenev will testify earlier than the Home Monetary Providers Committee on Feb. 18, Politico reported, citing unnamed sources.
Robinhood abruptly restricted buying and selling in GameStop on Thursday amid an obvious quick squeeze on it and different highly-leveraged shares coordinate by means of on-line chat rooms and frequented by Robinhood merchants.
The transfer sparked a backlash from retail traders who stated they have been being punished for his or her success in routing Wall Avenue execs who have been shorting the shares. Politicians rapidly jumped into the fray as effectively, portraying Robinhood’s transfer as an try to guard Wall Avenue Goliaths from populist merchants.
For its half, privately-held Robinhood says it was pressured to restrict buying and selling and lift capital to fulfill elevated margin necessities on the Depository Belief & Clearing Company (DTCC) clearing home pushed by the surge in speculative buying and selling by means of the location. “Robinhood has to function throughout the present regulatory surroundings,” the corporate stated in a weblog publish late Monday.
The corporate took in $3.4 billion from backers between Friday and Monday in a spherical led by Ribbit Capital with participation from present traders together with ICONIQ Capital, Andreessen Horowitz, Sequoia, Index Ventures, and NEA, the corporate stated. Robinhood is in negotiations with banks to boost one other $1 billion, Reuters reported late Monday, citing unnamed sources.
GameStop shares have continued to commerce in a variety, rising greater than $100 Friday, solely to fall again $100 in Monday’s common session and extra in after-hours buying and selling.
GameStop is a struggling brick-and-mortar online game retailer, hit laborious by the COVID-19 shutdowns and the long-term decline in retail mall visitors.
Silver futures, which have additionally been focused in retail investor chat rooms lately, slid late Monday after earlier surging to $29.42 an oz on the noon settlement.