KANSAS CITY, Kan. — Millions of Americans trade stocks or have market investment through a 401(k), so many eyes are on Wall Street after this saga involving GameStop.
U.S. Sen. Roger Marshall (R-Kan.) said on Fox News that the trading site, Robinhood, pulled the rug out from under regular investors when they limited trading of GameStop stock at its peak.
“Everyone deserves equal opportunity to make money on Wall Street, whether it is in small town U.S.A or in a big city, whether you work on Main Street or Wall Street,” Marshall said.
According to reports, Robinhood’s CEO is expected to testify before a House committee, as lawmakers on both sides of the aisle look into this.
“It’s definitely exciting seeing your investment go up, trying to play the market,” said Phil Macaluso who trades stock on TD Ameritrade.
Macaluso said he has only been doing it for a year or so, and in that time, his portfolio is up 45%.
Last week, he put $800 into GameStop after seeing a post on Reddit that the company’s stocks had been heavily shorted. That means large institutions, hedge funds, were strongly betting against it.
The forum rallied people to buy up shares.
“I didn’t buy any until late Wednesday, and it was already high then, and the goal was to hold onto it, but I felt like I was going to lose some money,” Macaluso said. “I got out of GameStop while I was ahead.”
Macaluso wasn’t alone in his investment.
So many people bought into GameStop that big-time investors lost billions. But sites like Robinhood, where everyday people trade, limited trading during the unprecedented spikes.
“I’ve had more people reach out to me on this than almost any financial thing in the last several years, and there have been some big things happening,” said Nathan Mauck, an associate finance professor at UMKC’s Bloch School.
He said the Securities and Exchange Commission is likely looking into regulation here.
“There’s a little bit of a David vs. Goliath thing going on, and that’s an interesting dynamic,” Mauck said. “Also, though, anytime you see this kind of price action, it just seems like the top of thing that’s likely to draw regulatory scrutiny.”
What that looks like remains to be seen.
Macaluso hopes nothing is done to make it harder on the little guy.
“They can basically manipulate markets whenever they feel like it, and now that the everyday person is doing it, they’re changing the rules, they’re moving the goal post,” Macaluso said.