The US Department of Justice has gotten into the great GameStop stock situation by investing in social media hubs and brokers like Robinhood.
The stakes have been raised on the grand GameStop Stock debacle as the US Department of Justice After the White House and Congress have analyzed the recent situation, it now appears that federal investigators are getting involved. Despite the general situation having calmed down, the aftermath can still have many consequences for both individuals and the stock market.
In early 2021, GameStop shares started to rise quite dramatically thanks to a small contraction. Going from just $ 20 a share to $ 40 … and then into the triple digits. The stock spiked for about a week, thanks in large part to media attention and the help of prominent figures like the world’s richest man, Elon Musk. It didn’t take much for the stock momentum to kick in, but once it did, it became an event that is sure to go down in history.
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Sadly, all good things must come to an end. The shares eventually tumbled and are now down to around $ 50 a share, which is still overvalued, but a drastic drop from what it had been riding. Now according to The Wall Street Journal, the U.S. Department of Justice is investigating the chaos by investigating social media companies (such as Reddit) and brokerage apps such as Robinhood, the company largely associated with the GameStop stock plunge by restricting the trade in your application. Prosecutors have cited information from Robinhood, but it is unclear what exactly they obtained.
The US Department of Justice is investigating whether or not there was market manipulation, which would mean a coordinated effort to increase stocks. The Department will need to find very specific evidence of key people coming together to artificially increase stocks. Elon Musk was silent regarding the actions shortly after tweeting “GameStonks,” likely at the request of those around him so as not to attract legal attention. Musk is still rallying the people behind various cryptocurrencies like Dogecoin online.
There has been a lot of speculation behind whether or not there will be any real legitimate cases for market manipulation. It is not illegal to share how much you like stocks. There are also many shows, outlets, and individuals that look at stocks and the broader market as a career, it likely comes down to how people wrote their posts and whether it can be argued that people did this on purpose. Whether this whole situation can save or not GameStop as a business remains to be seen.
Next: GameStop Stock Market Controversy Sparks White House Response
Source: The Wall Street Journal
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