Like many, I approach new movies with optimism, hoping to be entertained and perhaps even enlightened. However, sometimes initial doubts prove correct. This was the case with Dumb Money, the film depicting the GameStop short squeeze of 2021. While not entirely without merit – it has some amusing moments and decent acting – Dumb Money ultimately falls short. The narrative feels stretched, character development is minimal, and crucially, the movie struggles to clearly explain the GameStop saga, even for viewers somewhat familiar with financial markets. Those unfamiliar with the intricacies of the companies and individuals involved may find themselves lost. This review will delve into these shortcomings, but first, let’s revisit the backdrop against which the Dumb Money story unfolded.
Flashback to the Roaring 2020/2021 Stock Market
To truly grasp the context of Dumb Money, we need to travel back to the unusual period of late 2020 and early 2021 – a time that already feels like a distant memory.
- The world was grappling with a global pandemic, a period extensively documented and undeniably challenging.
- With lockdowns in effect, many individuals turned to day trading as a source of both entertainment and potential income, often done alongside consuming content on streaming services.
- Central banks, including the Federal Reserve, slashed interest rates to near zero and injected unprecedented amounts of money into the economy through quantitative easing, ostensibly to bolster pandemic-stricken economies. This, in turn, fueled a significant bubble across various financial markets.
- Speculative assets like SPACs, cryptocurrencies, and other high-risk investments experienced meteoric rises as investors, many new to the market, piled into them. The era saw figures like Chamath Palihapitiya frequently featured on financial news channels, promoting these trends.
- Simultaneously, a surge in Mergers & Acquisitions, IPOs, and SPAC deals kept investment banks incredibly busy. This boom led to a wave of “COVID hires” in the financial sector, sometimes with firms lowering their usual hiring standards.
It was during this volatile period that the GameStop short squeeze occurred in February 2021. My original article analyzing this event became the most-read piece that year on this site. Although briefly removed due to online harassment, it has since been restored for those interested in revisiting my initial analysis.
The media narrative at the time largely framed the GameStop event as a David-versus-Goliath story: individual investors on platforms like Reddit, often characterized as “dumb money,” uniting against Wall Street giants. This coalition, organized within the WallStreetBets subreddit, aimed to drive up the stock price of GameStop (GME), a struggling video game retailer, while hedge funds like Melvin Capital held substantial short positions against it.
This coordinated buying pressure triggered a classic short squeeze. Melvin Capital, facing mounting losses as GME’s price soared, was forced to cover its short positions by buying more shares, further accelerating the price increase. This dramatic surge in GameStop’s stock created significant, albeit often paper-based, wealth for many retail investors. However, the popular brokerage Robinhood controversially restricted purchases of GME shares, contributing to a subsequent price collapse. GameStop’s stock price eventually plummeted, now trading approximately 80% below its peak squeeze price.
My original analysis of the GameStop saga highlighted the oversimplification of this “dumb money” narrative. While retail investors acted as an initial catalyst, order data suggested that institutional investors and large trend-following funds played a more significant role in driving the majority of the price surge. While Melvin Capital and Robinhood faced negative repercussions, other large financial players, such as Citadel and Silver Lake, strategically positioned themselves to benefit from the market volatility.
Image depicting Keith Gill, known as Roaring Kitty, during his testimony, a central figure in the GameStop saga portrayed in the Dumb Money movie.
Dumb Money: Story and Character Deficiencies
As the preceding summary suggests, the GameStop short squeeze, while dramatic, presents a somewhat limited foundation for a full-length feature film. The core story, stripped down, lacks inherent narrative depth.
Traditional storytelling often relies on a protagonist with defined strengths and weaknesses who faces and overcomes obstacles to achieve specific goals. The interaction between protagonist and antagonist, and the protagonist’s eventual success or failure, forms the dramatic arc. The original Wall Street (1987) exemplifies this structure, with the complex relationship between Bud Fox and Gordon Gekko serving as the film’s emotional and narrative center.
Dumb Money largely departs from this established structure. Events unfold, but without a strong sense of character-driven causality. The central figure, Keith Gill, known as “Roaring Kitty” on Wall Street Bets, who championed GameStop in 2020, remains thinly sketched. His motivations – making money and “sticking it to the man” – are broadly applicable and lack specificity. By the film’s conclusion, despite amassing a $34 million fortune on paper through GameStop, Gill’s character remains largely unchanged. The movie attempts to elicit sympathy for him due to his Congressional testimony, but this feels somewhat unearned given the lack of deeper character exploration.
The antagonists – portrayed as Steve Cohen (Point72), Ken Griffin (Citadel), Gabe Plotkin (Melvin Capital), and Vlad Tenev (Robinhood) – are even less developed. Their scenes feel perfunctory, reminiscent of villainous exposition dumps in fantasy prologues, where evil plans are discussed but rarely translate into meaningful action within the main narrative. The film fails to convincingly explain why these billionaires are so concerned with GameStop or the activities of Redditors, given their vast and diversified financial portfolios.
Ultimately, Dumb Money succumbs to a common pitfall of “money movies”: overemphasizing financial mechanics at the expense of character motivations and emotional depth. While this approach can succeed if the characters are exceptionally engaging or the plot is relentlessly dynamic, Dumb Money lacks sufficient amounts of either to maintain sustained viewer investment.
The ensemble cast of Dumb Money, featuring actors portraying key figures in the GameStop saga, attempts to bring the complex financial story to life.
Dumb Money: Navigating the Financial Fray
The filmmakers of Dumb Money clearly aimed to present a simplistic “Wall Street bad, retail investors good” dichotomy. While this is a valid perspective, the film’s weakness lies in its superficial treatment of complex financial relationships and mechanisms. It skims the surface, lacking the depth needed to truly illuminate the intricacies of the GameStop event.
To their credit, the movie does touch upon important concepts like “payment for order flow” (PFOF) and the margin deposit requirements imposed by the Depository Trust & Clearing Corporation (DTCC), which directly contributed to Robinhood’s decision to restrict GameStop trading. Including these details adds a layer of nuance that could have easily been omitted.
However, it’s questionable whether a viewer without prior financial knowledge could fully grasp the interconnectedness of Robinhood, Citadel, GameStop, and Reddit solely from watching Dumb Money. The movie lacks a crucial “explainer scene” to clearly articulate these relationships – how Citadel benefited from Robinhood’s order flow, why zero-commission trading and pandemic lockdowns fueled the surge in retail day trading, and the broader market context.
Films like The Big Short effectively demystified the 2008 financial crisis through concise and impactful explanatory scenes. Dumb Money could have benefited immensely from a similar approach, perhaps integrated within the Congressional hearing sequences toward the movie’s end, to clarify the complex web of financial actors and actions.
Dumb Money and Dubious Conclusions
Beyond the narrative gaps, Dumb Money falters in its concluding statements, presenting several debatable assertions through on-screen text:
- Robinhood’s IPO failure is attributed to negative publicity stemming from the GameStop saga and trading restrictions.
- The GameStop short squeeze is portrayed as a watershed moment, fundamentally altering the financial industry by forcing hedge funds to pay attention to retail investors and online sentiment.
- Robinhood and Citadel are implied to have colluded to limit GameStop trading.
- Melvin Capital’s closure is directly linked to GameStop losses and meme stock speculation.
While point #4 is largely accurate – Melvin Capital’s aggressive short positions made it vulnerable to any significant short squeeze, regardless of retail involvement – the other conclusions are more problematic.
Regarding point #3, while leaked text messages fueled collusion allegations, a lawsuit was ultimately dismissed due to insufficient evidence.
Points #1 and #2 are particularly weak. Robinhood’s IPO underperformance is more likely attributable to fundamental issues with its business model in a post-pandemic environment, rather than solely to the GameStop fallout. Furthermore, the notion that the GameStop event revolutionized the finance industry is overstated.
Hedge funds and quantitative funds have always monitored online data and sentiment for market insights. While attention to retail trading trends may have intensified marginally, it’s not a seismic shift. These funds were already utilizing sophisticated data analysis techniques, including internet data, long before GameStop.
In essence, many of Dumb Money‘s conclusions lean towards a romanticized and somewhat inaccurate interpretation of the real events.
Dumb Money: Streaming Verdict and Final Thoughts
Despite these criticisms, Dumb Money isn’t a terrible movie. It occupies a middle ground – offering sporadic humor and commendable performances from a talented cast, but undermined by shallow characters and a flimsy plot.
For those with a keen interest in trading and financial markets, Dumb Money might be worth watching when it becomes available on streaming services. However, a theatrical viewing is likely not warranted. Manage expectations; it’s more of a light entertainment piece than a deeply insightful financial drama.
For a truly educational finance film that expertly explains complex topics, The Big Short remains the gold standard. For high-energy entertainment within the finance world, albeit with a focus on excess and questionable behavior, The Wolf of Wall Street delivers. And for a masterclass in writing, character development, and finance-adjacent drama, Succession is unparalleled.
There are undoubtedly compelling finance stories waiting to be told on screen, but they will require stronger narrative foundations than Dumb Money – stories that lend themselves to genuine character arcs and compelling plot developments. As viewers anticipate Dumb Money‘s eventual streaming release, it serves as a reminder of the ongoing fascination with financial dramas, even if their execution sometimes falls short of their ambitious subject matter.
