Sources tell FOX Business' Charlie Gasparino that hedge funds are worried that Congress may force laws restricting trading practices, including short selling.
Behind GameStop's stock surge is the grim reality of its prospects: The video game retailer is floundering even as the industry around it is booming.
GameStop has been swept up in a battle between big-moneyed hedge funds betting against it and small investors trying to prop it up. That has caused GameStop's share price to soar despite the shaky financials underneath.
Flailing companies like AMC Entertainment and American Airlines have likewise enjoyed a stock surge, but GameStop has been the primary battleground between the Davids and the Goliaths. Shares rocketed 1,600% in the last three weeks, closing at $325 per share on Friday and giving GameStop a market cap of nearly $17 billion. Shares have since cratered. On Tuesday, they fell 60% to close at $90.