Whenever a new film hits theaters, especially one tackling complex financial narratives, I approach it with a sense of optimism. Despite any reservations about plot, script, or production, I always hope to be pleasantly surprised. However, as often happens, initial hesitations can be telling, and in the case of Dumb Money, the movie attempting to capture the whirlwind of the 2021 GameStop short squeeze, my instincts proved correct.
While Dumb Money offers moments of entertainment and commendable performances, labeling it as a “bad” movie would be too harsh. Yet, the narrative feels stretched thin, character development is noticeably absent, and crucially, the film struggles to effectively demystify the GameStop saga for viewers unfamiliar with the intricacies of the financial world. Having followed the events closely, I could piece together the story, but those without prior knowledge might find themselves lost in the complexities.
In this review, I will delve into these points, but first, let’s set the stage with some essential background.
Flashback to the Wild West of the 2021 Stock Market
To truly grasp the premise of Dumb Money, we need to journey back to the tail end of 2020 and the early months of 2021 – a period that now feels like a distant memory. This era was defined by:
- A global pandemic that reshaped daily life and economies worldwide.
- Widespread lockdowns that pushed many towards day trading as a source of both entertainment and income amidst the isolation.
- Rock-bottom interest rates and unprecedented money printing by the Federal Reserve and global central banks, fueling a significant bubble across financial markets under the guise of pandemic stimulus.
- The meteoric rise of speculative assets like SPACs, cryptocurrencies, and meme stocks, attracting hordes of investors eager for quick gains. Remember the ubiquity of figures like Chamath Palihapitiya on financial news channels?
- A surge in corporate deal-making, including M&A, IPOs, and SPAC mergers, leading to a hiring frenzy in investment banking, often at the expense of traditional hiring standards.
I documented the GameStop short squeeze as it unfolded in February 2021, an event that unexpectedly became the most-read article that year. While temporarily removed due to online harassment, it’s since been reinstated for those interested in revisiting my initial analysis.
The media narrative painted the GameStop event as a David-versus-Goliath battle, portraying retail investors from Reddit’s Wall Street Bets forum uniting to challenge Wall Street by driving up GameStop’s stock against hedge funds like Melvin Capital, which had heavily shorted the stock.
This buying frenzy triggered a classic short squeeze, forcing Melvin Capital to cover its short positions by purchasing more shares, further inflating the stock price. Many ordinary individuals saw their portfolios swell on paper. However, the popular trading platform Robinhood controversially restricted buying of GME shares, causing the stock to plummet – it now trades roughly 80% below its peak squeeze price.
My original analysis challenged this simplistic narrative, highlighting that while retail investors acted as the initial spark, institutional investors and large trend-following funds were the primary drivers behind the massive price surge, based on order data. While Melvin Capital and Robinhood suffered reputational and financial damage, other major players like Citadel and Silver Lake strategically positioned themselves to benefit from the volatility.
Image alt text: Roaring Kitty, also known as Keith Gill, testifying before Congress during the GameStop hearing, a key moment depicted in the Dumb Money movie.
Dumb Money: Story and Character Deficiencies
As the preceding summary suggests, the GameStop saga, while dramatic, presents a somewhat limited foundation for a feature-length film. The core issue is the lack of traditional narrative depth. Classic storytelling often revolves around a protagonist with defined strengths and flaws who confronts obstacles to achieve specific goals, engaging in a dynamic interplay with antagonists. Think of the original Wall Street (1987), where the complex relationship between Bud Fox and Gordon Gekko, evolving from mentorship to rivalry, drives the film’s narrative engine.
Dumb Money deviates significantly from this structure. Events unfold in a rather linear, almost documentary style, and the central figure, Keith Gill, or “Roaring Kitty,” the Reddit user who championed GameStop, remains underdeveloped as a character. His motivations – to make money and challenge the financial establishment – are generic, applicable to a vast majority of people. By the film’s conclusion, despite amassing a paper fortune of $34 million from his GameStop investments, Roaring Kitty undergoes minimal personal transformation. The film attempts to elicit sympathy by portraying his grilling before Congress, yet this feels like a superficial effort to create depth.
The antagonists – portrayed as Steve Cohen of Point72, Ken Griffin of Citadel, Gabe Plotkin of Melvin Capital, and Vlad Tenev of Robinhood – are even less compelling. Their depictions are reminiscent of stereotypical villain portrayals, confined to brief scenes discussing their schemes without meaningfully impacting the central plot. The film fails to convincingly explain why these financial titans were so fixated on GameStop and a group of online retail investors, given their vast portfolios and broader concerns.
Ultimately, Dumb Money succumbs to a common pitfall in financial movies: an excessive focus on the mechanics of money at the expense of exploring персональные motivations and emotional depth. While this approach can sometimes succeed if the characters are exceptionally engaging or the plot is relentlessly dynamic, Dumb Money lacks sufficient dynamism to maintain sustained viewer engagement.
Dumb Money: Navigating the Financial Maze
The filmmakers clearly aimed to promote a narrative of “Wall Street versus the people,” positioning retail investors as underdogs fighting against a corrupt system. While this thematic choice is valid, the execution suffers from a lack of depth in explaining crucial financial relationships and concepts. The film deserves credit for touching upon complex ideas like “payment for order flow” and the margin deposit requirements imposed by the Depository Trust & Clearing Corporation (DTCC), factors that directly led to Robinhood’s controversial restrictions on GameStop trading. Including these details added a layer of sophistication that could have easily been omitted.
However, the film falls short in clarifying the interconnectedness of Robinhood, Citadel, GameStop, and Reddit for a general audience. Someone without a finance background might struggle to grasp these relationships after watching Dumb Money. The film needed a dedicated “explainer scene” to connect the dots – to illustrate how Citadel benefited from Robinhood’s order flow, and to clarify why zero-commission trading, pandemic lockdowns, and the market bubble collectively spurred a surge in retail day trading.
Films like The Big Short masterfully simplified the complex mechanics of the 2008 financial crisis through concise, impactful scenes. Dumb Money could have benefited immensely from a similar approach, perhaps integrated into the Congressional hearing sequences towards the movie’s climax.
Image alt text: Dramatic chart illustrating the volatile GameStop stock price during the 2021 short squeeze, highlighting the rapid ascent and subsequent decline.
Dumb Money: Questionable Conclusions
Beyond the explanatory gaps, Dumb Money stumbles with several unsubstantiated conclusions presented in its final moments through on-screen text. These include:
- Robinhood’s IPO failure attributed to the GameStop controversy and trading restrictions.
- The GameStop short squeeze as a paradigm shift, forcing hedge funds to vigilantly monitor retail investor sentiment online.
- Allegations of collusion between Robinhood and Citadel to manipulate GameStop trading.
- Melvin Capital’s collapse solely due to GameStop and meme stock losses.
While point #4 is partially accurate – Melvin Capital did shut down due to significant losses amplified by meme stock volatility – attributing it entirely to retail investors is misleading. Any substantial short squeeze could have severely impacted the fund.
Regarding point #3, although leaked messages hinted at potential coordination, legal challenges citing collusion were dismissed due to insufficient evidence.
I strongly disagree with points #1 and #2. Robinhood’s IPO underperformance stemmed from deeper issues – a flawed business model exposed in a post-pandemic environment. Furthermore, the GameStop saga did not fundamentally alter the financial industry’s landscape. Hedge funds and quant funds have long utilized internet data and monitored online trends. While there might be increased attention to retail trading activities, it’s not a revolutionary change.
In essence, many of the film’s concluding statements are speculative and reflect a romanticized, rather than a realistic, interpretation of events.
Dumb Money: Final Assessment
Despite these criticisms, Dumb Money isn’t a complete failure. It occupies a middle ground – offering scattered moments of humor and strong performances from a talented ensemble cast, yet undermined by shallow characterizations and a superficial narrative.
If you are deeply invested in trading or financial markets, Dumb Money might be worth streaming when available. However, a theatrical viewing is less compelling. For a truly insightful financial film that elucidates complex concepts effectively, The Big Short remains the gold standard. For finance-themed entertainment with a blend of excess and dark humor, The Wolf of Wall Street is a superior choice. And for a masterful combination of all these elements with exceptional writing and character development, Succession is unparalleled.
There are undoubtedly more compelling financial stories waiting to be told, but they will require narratives with greater depth, character-driven plots, and genuine complexity beyond the surface-level drama presented in Dumb Money.
