New York: US securities regulators studying the mysterious jump in GameStop shares in January called on Monday for a thorough investigation of “game-like” features on some trading platforms.
A Securities and Exchange Commission report investigating volatility in GameStop and other so-called “meme” stocks said wild market moves last winter had “potentiated” ways to ensure “fair, orderly and efficient” markets. highlighted the need for study and further consideration”. .
The 45-page SEC report said, “Consideration should be made whether game-like features and celebratory animations, which are intended to potentially generate positive feedback from trading lead investors, would be comparable to otherwise.” Let’s do more business.”
The report comes on the heels of previous comments from SEC Chairman Gary Gensler, who has previously criticized “gamification” on Robinhood, an online platform popular with young investors.
Robinhood has been credited with introducing a generation of new individual investors to the stock market, but the platform is also known for features that critics say can make it addictive.
The SEC report describes GameStop’s end-2020 high of $483 amid frenzied trading on Jan. 12, rising from a little less than $20 a barrel.
The boom was seen in some financial media as the willingness of at least retail investors to cooperate in an effort to retaliate against short sellers communicating on the Reddit platform.
Seasoned investors viewed GameStop’s activities as detracting from fundamental questions about the company’s financial performance and its prospects.
The SEC report did not conclude on the root cause of GameStop’s volatility, saying, “Whether motivated by a desire to squeeze short sellers and thereby profit from the resulting increase in price, or by a belief in GameStop’s fundamentals, it It was the positive sentiment, not the buy-by-cover, that sustained GameStop stock’s week-long price appreciation.”
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)