An SEC study questioned whether "game-like" features connected immoderate trading apps had contributed to the frenzy implicit GameStop.
US securities regulators studying the mysterious surge successful GameStop shares successful January called Monday for deeper introspection of "game-like" features connected immoderate trading platforms.
A Securities and Exchange Commission study examining volatility successful GameStop and different alleged "meme" stocks, said the chaotic marketplace moves past wintertime highlighted the request for "potential survey and further consideration" of ways to guarantee "fair, bid and efficient" markets.
"Consideration should beryllium fixed to whether game-like features and celebratory animations that are apt intended to make positive feedback from trading pb investors to commercialized much than they would otherwise," said the 45-page SEC report, which stopped abbreviated of recommendations.
The study comes connected the heels of earlier comments from SEC Chair Gary Gensler, who has antecedently criticized "gamification" connected the online level Robinhood, which is fashionable with younger investors.
Robinhood has been credited with introducing a procreation of caller idiosyncratic investors to the stock market, but the level is besides known for features that critics accidental tin marque it addictive.
The SEC study describes GameStop's torrid emergence of a small nether $20 a tube astatine the extremity of 2020 to a precocious of $483 connected January 12 amid frenzied trading.
The surge was seen successful immoderate fiscal media arsenic driven astatine slightest successful portion by a tendency of retail investors communicating connected the Reddit platform collaborating successful an effort to retaliate against abbreviated sellers.
Seasoned investors viewed GameStop's movements arsenic divorced from cardinal questions astir the company's financial performance and its prospects.
The SEC study did not gully conclusions connected the basal origin of GameStop's volatility, saying, "Whether driven by a tendency to compression abbreviated sellers and frankincense nett from the resultant emergence successful price, oregon by content successful the fundamentals of GameStop, it was the affirmative sentiment, not the buying-to-cover that sustained the weeks-long terms appreciation of GameStop stock."
© 2021 AFP
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