Looks like Gary Gensler might be doing more than just watching meme stocks.
GameStop Corp. GME,
revealed late Wednesday that the U.S. Securities and Exchange Commission has asked for its cooperation in an investigation into the unprecedented volatility that its stock has seen in recent months. The company also suggested that it is not the only one being investigated.
“On May 26, 2021, we received a request from the SEC’s staff for voluntary disclosure of documents and information about an SEC investigation into the trading activity of our securities and other companies̵
“This study is not expected to adversely affect us,” said the dealer.
Despite stronger fiscal first-quarter sales, a minor loss of $ 66.8 million and GameStop announcing the long-awaited appointment of a new CEO and CFO, its stock fell as much as 13% in after-sales trading, before it restored any soil.
It was not alone. Shares in AMC Entertainment Holdings Inc. AMC,
fell as much as 8.3%, BlackBerry Ltd. BB,
5.2%, Koss Corp KOSS,
1.3%, and Nokia Corp. ENOUGH,
0.9% in expanded trading after the news, with many investors already using SEC Commissioner Gensler to take a closer look at the phenomenon of meme stocks.
The newly-appointed Wall Street top man on Monday signaled that meme stocks were on his radar as the agency said “SEC personnel continue to monitor the market in the light of the ongoing volatility of certain stocks to determine if there have been market disruption, manipulative trade or other misconduct. ”
While one of the SEC’s primary roles has been to protect retail investors, some investors gathered on social media platforms on Wednesday afternoon sounded less than overjoyed by potentially more oversight of meme stocks.
Several positions on Reddit boards even questioned whether the SEC investigation might have focused on naked short-circuiting of shares in meme stocks, which could mean more problems for hedge funds and market makers. Others reacted with skepticism.
“Gary Gensler published statements about reviewing payment for order flow,” said TheIncredibleNurse on Reddit Board Superstonk. “We have heard them before, but now it looks like [more] official. Maybe the SEC will do something [after all]eventually when they close Pornhub. ”
There was also more fundraising effort focusing on GameStops positives and looking past the plug around from the country’s largest financial regulator.
“Some of you have not been here since Jan, and it turns out,” oXyounceXo scolded. “This is nothing. Tighten up and fu-king hodl. ”
GameStop declined to comment.