Bloomberg

GameStop hearing was a solution in search of a problem

Signage on a GameStop store in Emeryville, Calif., on Jan. 27, 2021. Foto: Bloomberg/David Paul Morris

The House Financial Services Committee convened the main players in the GameStop Corp. saga for a hearing on Thursday, and the mood was decidedly populist. Both Democrats and Republicans expressed solidarity with retail investors, but after more than five hours of questions, it still wasn't clear why ordinary investors need their help.

If anything, the showdown between hedge funds and Redditors that gave rise to the hearing has shown that retail investors are far more sophisticated than lawmakers and regulators give them credit for. Using publicly available information and the humble tools Robinhood and other trading apps provided them, they laid low mighty hedge fund managers like Melvin Capital by betting against them and winning, some of them minting a fortune in the process...

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