Whenever I anticipate watching a new movie, I consciously try to maintain an optimistic outlook. Even when doubts creep in about the plot, script, or production quality, I hope to be pleasantly surprised.
However, experience often aligns with initial hesitations; if a film gives me a bad feeling beforehand, it usually ends up having problems. This was precisely my experience with Dumb Money, the recent movie dramatizing the GameStop short squeeze of 2021.
While Dumb Money features some genuinely funny moments and commendable performances, preventing it from being outright “bad,” the narrative feels stretched, character development is minimal, and crucially, the movie struggles to clearly explain the GameStop saga to those unfamiliar with it.
My prior knowledge of the companies and individuals involved helped me follow along, but viewers without this background might find themselves confused. I’ll elaborate on these points, but first, let’s set the stage with some necessary context.
Flashback to a Volatile Stock Market Era
To truly grasp the premise of Dumb Money, we need to revisit the period from late 2020 to early 2021 – a time that already feels distant:
- The world was in the grip of a global pandemic. The impact was far-reaching and significantly disrupted daily life.
- With widespread lockdowns, many people turned to day trading as a source of both entertainment and potential income, alongside the surge in streaming entertainment consumption.
- Central banks, including the Federal Reserve, slashed interest rates to near zero and initiated massive money printing to finance “fiscal stimulus” measures intended to mitigate the pandemic’s economic fallout. This influx of liquidity inflated a bubble across financial markets.
- Speculative assets like SPACs, cryptocurrencies, and various meme stocks experienced explosive growth, often described as going “to the moon,” fueled by a rush into riskier investments. The ubiquitous presence of figures like Chamath Palihapitiya on financial news networks became emblematic of this era.
- Simultaneously, deal-making activity in M&A, IPOs, and SPAC transactions was booming, leading investment banks to rapidly expand their teams, sometimes prioritizing speed over traditional hiring criteria.
I covered the GameStop short squeeze as it unfolded in February 2021. That article became the site’s most-read piece that year. Although temporarily removed due to disruptive online trolling, it has been reinstated for those interested in revisiting my initial analysis.
The mainstream media often depicted the GameStop event as a David-versus-Goliath battle, with retail investors on platforms like Reddit’s Wall Street Bets banding together to drive up GameStop’s stock price, specifically targeting hedge funds like Melvin Capital, which had taken a substantial short position against the company.
This coordinated buying activity triggered a “short squeeze,” compelling Melvin Capital to cover its short positions by purchasing GameStop shares, further accelerating the stock’s upward trajectory.
This dramatic price surge created paper wealth for many ordinary investors. However, the popular brokerage Robinhood controversially restricted purchases of GME shares, leading to a sharp price correction. The stock price subsequently plummeted and remains approximately 80% below its peak squeeze value.
In my original article, I challenged this simplistic narrative. While retail investors played a catalytic role, analysis of order data indicated that institutional investors and large, trend-following funds were the primary drivers behind the majority of the price escalation.
While Melvin Capital and Robinhood suffered reputational and financial damage, other major financial players, such as Citadel and Silver Lake, strategically positioned themselves to benefit from the volatility.
Image: A scene depicting Roaring Kitty during the congressional hearing, a pivotal moment in the GameStop saga.
Dumb Money: Character Sketch and Narrative Limitations
As highlighted above, the GameStop saga, while dramatic, presents a somewhat limited foundation for a full-length feature film due to its relatively straightforward narrative structure.
Traditional storytelling often revolves around a protagonist with defined strengths and weaknesses who faces and overcomes significant obstacles to achieve specific objectives. The interaction between the protagonist and antagonist drives the plot, leading to either success or failure for the main character.
The original Wall Street movie from 1987 exemplifies this classic structure, focusing on the complex relationship between Bud Fox and Gordon Gekko, which evolves from mentorship to antagonism, forming the emotional and thematic core of the film.
Dumb Money deviates from this model. Events largely unfold without deep character-driven motivations. The central figure, “Roaring Kitty” (Keith Gill), who ignited the GameStop frenzy on Wall Street Bets in 2020, remains underdeveloped.
While his motivations appear to be financial gain and a desire to challenge established financial institutions (“stick it to the man”), these are broadly relatable desires, not unique character traits.
By the film’s conclusion, despite amassing a $34 million fortune from his GameStop investments, Roaring Kitty’s persona remains largely unchanged. The narrative attempts to evoke sympathy for him due to his grilling by Congress, but this feels somewhat manufactured given his financial success.
The antagonists – portrayed as Steve Cohen (Point72), Ken Griffin (Citadel), Gabe Plotkin (Melvin Capital), and Vlad Tenev (Robinhood) – are even less developed. Their scenes often resemble stereotypical villainous plotting in fantasy prologues, with discussions of schemes that lack direct engagement with the main storyline.
The film fails to adequately explain why these billionaires became so concerned about GameStop and the actions of Redditors, considering the vast scale of their financial portfolios and broader business concerns.
Ultimately, Dumb Money succumbs to a common pitfall of “money movies”: an excessive focus on financial mechanics at the expense of exploring character motivations in depth.
While this approach can work if the characters are inherently captivating or the plot is relentlessly action-packed, Dumb Money lacks sufficient dynamism to maintain sustained viewer engagement.
Image: The ensemble cast of “Dumb Money,” highlighting the star-studded lineup portraying key figures in the GameStop saga.
Dumb Money: Navigating the “Finance” Terrain
The filmmakers clearly aimed to project a narrative of “Wall Street as antagonist; populist retail investors as heroes,” a thematic choice that is understandable given the context of the GameStop events.
However, the film’s primary weakness lies in its superficial treatment of complex financial relationships, corporate entities, and key personalities. It skims the surface rather than diving deep to provide meaningful explanations.
To their credit, the movie touches upon crucial concepts such as “payment for order flow” and the margin deposit requirements imposed by the Depository Trust & Clearing Corporation (DTCC), which were instrumental in Robinhood’s decision to restrict GameStop trading.
Including these elements added a layer of complexity and accuracy that could have easily been omitted.
Nevertheless, it’s questionable whether a viewer without prior financial knowledge could accurately articulate the intricate relationships between Robinhood, Citadel, GameStop, and Reddit solely from watching the movie.
The film would have benefited significantly from a dedicated “explainer scene” to clarify these connections and illuminate how Citadel profited from Robinhood’s order flow, and why the confluence of zero-commission trading, pandemic lockdowns, and the broader market bubble catalyzed the surge in retail day trading.
The Big Short masterfully simplified the complexities of the 2008 financial crisis through several well-crafted explanatory scenes. Dumb Money could have adopted a similar strategy, perhaps integrated into the congressional hearing sequences towards the film’s conclusion.
Dumb Money and Its Questionable Conclusions
Beyond the narrative gaps, the film’s concluding statements, delivered via on-screen text, present several debatable assertions.
The movie suggests or directly states:
- Robinhood’s IPO failed due to the negative publicity generated by the GameStop saga and the trading restrictions imposed on its users during the squeeze.
- The GameStop short squeeze fundamentally “changed the industry” by forcing hedge funds to acknowledge and monitor retail investor sentiment online, prompting them to actively scan internet forums for emerging trends.
- Robinhood and Citadel engaged in collusion to deliberately limit GameStop trading activities, allegedly to benefit Citadel.
- Melvin Capital collapsed primarily due to its losses incurred from the GameStop short squeeze and exposure to other meme stocks.
While point #4 is factually accurate – Melvin Capital did shut down following substantial losses, largely attributed to the GameStop event – attributing this solely to retail investors is an oversimplification. Any significant short squeeze could have triggered similar consequences for a fund with such concentrated short positions.
Regarding point #3, while leaked communications raised suspicions of potential collusion, a legal challenge was ultimately dismissed in court due to insufficient evidence.
Points #1 and #2 are particularly contentious. Robinhood’s IPO underperformance is more likely attributable to inherent weaknesses in its business model and its reduced appeal in a post-pandemic economic environment, rather than solely the GameStop fallout. Furthermore, the notion that the GameStop event revolutionized the finance industry is overstated.
Hedge funds and quant funds have long utilized internet data and sentiment analysis in their strategies. While the GameStop episode might have heightened awareness of retail investor influence, it’s unlikely to represent a paradigm shift in industry practices.
In summary, many of Dumb Money’s concluding pronouncements are questionable and reflect a somewhat romanticized interpretation of the actual events.
Dumb Money: Final Assessment
Despite these criticisms, Dumb Money is not a “bad” movie. It occupies a middle ground: it offers moments of humor and strong performances from a talented cast, but these are undermined by underdeveloped characters and a somewhat superficial plot.
For those with a keen interest in trading and financial markets, Dumb Money might be worth watching when it becomes available on streaming platforms. However, it’s not a strong recommendation for a theatrical viewing.
For viewers seeking an insightful and educational finance movie that adeptly explains complex financial concepts, The Big Short remains the gold standard.
For entertainment-focused finance films featuring excess, eccentric characters, and dramatic narratives, The Wolf of Wall Street is a better choice.
And for a combination of depth, entertainment, sharp writing, and compelling characters within a financial backdrop, Succession (though a TV series) surpasses Dumb Money significantly.
The world of finance undoubtedly holds more compelling stories waiting to be told on screen. However, future projects will require more robust narratives than Dumb Money, narratives that lend themselves to richer character development and the intricate plot dynamics characteristic of compelling storytelling.
