Sarah Cabral, Amy LaCombe, Tracy Couto
Case Study: Robinhood’s Decision to Halt the Trade of GameStop Stock
In this business ethics case study, we will focus on the history making GameStop short and stock price surge. Specifically, the decision point/question will center on Thursday, Jan. 28th, 2021 when Robinhood's CEO Vlad Tenev faced the decision of whether or not to halt the trading of GameStop stock on its stock trading app. Of course, the company did do this and faced significant criticism for it. However, could Robinhood’s decision be viewed as socially responsible? Does Robinhood have a duty to self-regulate extremely volatile trades? In order for students to understand the context within which this decision was made and debate the appropriateness of the decision, we will provide an overview of the industry Robinhood is a part of and their role within it, in addition to providing a background on GameStop. Furthermore, the social media company, Reddit, which provided the platform for users to connect and rally behind GameStop and buy up shares, will also be explained and examined. In the accompanying teacher’s note, we will explain relevant terminology, such as “short” and “short squeeze,” as well as providing both discussion questions and answers. It is our understanding that this case study will be both relevant and important to discuss with undergraduate students in our Jesuit business schools.