Massachusetts Secretary of State William Galvin is asking the New York Stock Exchange to suspend trading in GameStop shares for a month after its share recently rose following a major boost from an army of investors on Reddit.
“I’m keeping a close eye on the situation with GameStop shares because I’m concerned that investors in Massachusetts will be seriously harmed,” Galvin said in a statement on Wednesday.
“I have called on the New York Stock Exchange to suspend trading in GameStop shares for 30 days, to allow the cooling-off period,” he added. “I hope federal regulators will investigate this as well.”
A spokesman for the U.S. Securities and Exchange Commission declined to comment.
Wallstreetbets’ Reddit investors boosted the stock by about 1,800% in a month.
GameStop shares were at $ 18.84 on the last day of 2020. The value was up to $ 359.63 on Wednesday afternoon.
The army of optimistic investors with smaller pockets is throwing away dollars and buying orders for the share of GameStop – in direct opposition to a group of wealthy investors who expected the share price to fall.
These wealthy investors shorted the stock, meaning they borrowed and sold shares, hoping to buy it back at a cheaper price and pocket the difference.
But such bets have been disastrous recently, and the rise in the stock has forced some short sellers to get out of their bets, done by buying shares of the stock. This helped to further accelerate its momentum.
Many of the smaller investors see it as a battle between ordinary people and hedge funds and large Wall Street businesses.
Elizabeth Warren, Senator Elizabeth, weighed in on Wednesday, saying in a statement on the recent GameStop trade: ‘With stocks rising while millions are unemployed and struggling to pay bills, it’s no news that the stock market does not reflect our real economy not. . The same hedge funds, private equity firms and wealthy investors who were upset by the GameStop operations have for years treated the stock market like their own personal casino while everyone else pays the price. ”
She added: “It’s been a long time since the SEC and other financial regulators have woken up and done their job – and with a new government and Democrats running Congress, I intend to make sure they do.”
Herald Wire Services contributed to this report.