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Gamestop’s market adventure and Robinhood’s dramatic reset spark US, EU regulatory concerns
05 March 2021 00:00
The rollercoaster ride that shares of GameStop went on earlier this year had little to do with the value of the US videogame and electronics retailer and more to do with a “short squeeze” — a buying frenzy designed to hurt those who had bet on the share value going down. The unusual move was orchestrated by members of a Reddit community and led to the controversial move by the go-to app used by small-time investors, Robinhood, to suspend trading as it built up cash reserves. The controversy has sparked a discussion on both sides of the Atlantic about what regulatory measures are needed to manage these new challenges.
US stock-market volatility & the rise of easy-to-use online brokerages are causing EU regulators to look at tweaking the bloc's rulebook.
Large online platforms could be held responsible for hosting misleading financial-market information or abuse, EU regulators have suggested.