ETH205 Project-Term Paper
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Wilmington University *
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Course
405
Subject
Philosophy
Date
Feb 20, 2024
Type
docx
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6
Uploaded by CommodoreTankKoala30
Project/Term Paper
ETHICS 205
Britta Wise
American National University
February 6, 2021
I decided to write my paper on the topic of ‘The forces driving the GameStop rebellion’. This topic has been a big issue as of late because it derives from financiers that bet heavily on the
failure of the gaming company Game Stop. GameStop’s price skyrocketed due to traders on Reddit. GameStop’s shares grew more than 14,000%, selling at around $328 per share and later plummeting to about $50 per share.
“The share price for GameStop doesn’t tell the whole story about the company. Indeed, one of the reasons for its stratospheric gains is that so many institutional investors were betting on it to fail – to an absurd degree. That type of investing, known as short selling, opened the door
to individuals who coordinated their efforts online to drive up the price.” (Gonzalez, 2021).
Although stock prices have always been disconnected for the average person, this incident throughs all principles relating that logic and basic investments out of the window. “Lost in all the hoopla is that GameStop continues to falter when it comes to all the important metrics for a company, with declining sales and the closing of 462 stores last year.” (Gonzalez, 2021). As a whole GameStop was not really doing the greatest as a company for in person sales versus digital sales. Compared to the two, online sales were doing significantly better given the current pandemic, so this raises questions as to what really did cause the price jump within the GME stock. Not only that, but was it truly even worth it especially since it plummeted shortly after.
“When the app Robinhood announced it would stop trading the targeted stocks, some quickly filed a lawsuit accusing it of market manipulation”. (Ghitis, 2021). The moves that Robinhood made raises questions of if the stopped trading was done ethically or if it were just a
ploy to keep the rich richer. When investigated, Robinhood quickly changed their tune stating that it was not done purposefully but in system error. There are people that compare the incident to the riots that took place at the US Capitol since it caused riots and stances alike. Although they are two totally different occurrences, some feel that the lawsuits and stances against Robinhood are justifiable. “If a Reddit forum can create
and destroy billions of dollars, how much can we trust the markets, financial engines of the US economy? And if the players could disrupt US markets, what could they do to smaller ones around the world? How much should we worry about the global economy, already battered by a once-in-a-century pandemic?” (Ghitis, 2021).
To answer those questions is short, it makes it harder for the people to trust the markets and financial engines of the US economy because at any given point they are able to change the game and make the playing field uneven. If it is this easy for the players to disrupt these markets with no hesitation, then it would be even easier for them to disrupt and potentially destroy the smaller ones around the world with no issue. The global economy has already been in a shaky position given the current pandemic and disputes such as this one makes it even worse. Situations like this makes it more worrisome of what is to come or what is expected of the market. “The Reddit traders broke no glass; they didn’t kill anyone. But there was plenty of metaphoric and very real financial carnage.” (Ghitis, 2021).
Much of the actions taken by Reddit as well as Robinhood arise the questions as to if what was done is ethical or not, and to be quite frankly I do not believe that it was very ethical at all. In no way shape or form is it right that people of higher powers to put a block, to call it plainly against the people under them to not be able to trade or buy the GameStop shares.
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Although there are claims that it was ethical and not done purposeful, I feel that there should be some laws in place that would protect all buyer and offer equal opportunities for all no matter their financial stature. I also do not believe that Reddit or Robinhood had the best intentions instore for all of the buyers all the way around. The playing field was definitely stacked against those who were not top players and to me that is and was not fair whatsoever and
brings multiple questions into play about both companies ethics.
References
Ghitis, O. (2021, January 29). Opinion: The forces driving the GameStop rebellion. Retrieved February 07, 2021, from https://www.cnn.com/2021/01/29/opinions/gamestop-stock-
rebellion-ghitis/index.html
Gonzalez, O. (2021, February 05). GameStop stock is falling after Reddit surge. Here's why that's not a surprise. Retrieved February 07, 2021, from https://www.cnet.com/personal-
finance/gamestop-continues-to-fall-after-reddit-surge-heres-why-you-shouldnt-be-
surprised/
higher up and I feel as though the companies dropped the ball to make those customers
or traders more comfortable or likely or inclined to trade with them again anytime soon or in the near future.
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