Whenever a new Money Movie hits the screens, there’s always a sense of anticipation. Will it be another Wall Street or The Big Short, offering both entertainment and a sharp look into the world of finance? Or will it fall flat, failing to capture the complexities and human drama behind the numbers? Going into Dumb Money, the film about the GameStop saga, optimism was in the air, but as with many things in the financial world, initial instincts can be telling.
While Dumb Money isn’t a complete disaster – it has its moments and some commendable performances – it ultimately struggles to deliver a compelling and insightful narrative. The storyline feels stretched, character development is minimal, and crucially for a “money movie”, it doesn’t effectively explain the intricacies of the GameStop phenomenon, especially for viewers unfamiliar with the financial jargon.
For those already versed in the GameStop saga, the movie offers a recap. But for the uninitiated, Dumb Money risks being more confusing than enlightening. Let’s delve into why this highly anticipated “money movie” doesn’t quite hit the mark, starting with the crucial context that sets the stage.
Flashback to the Roaring (and Confusing) 2021 Stock Market
To truly grasp the premise of Dumb Money, we need a quick trip back to the chaotic era of late 2020 and early 2021. It feels like ancient history now, but these conditions were critical in setting up the GameStop explosion:
- A global pandemic had the world in its grip. Lockdowns were the norm, and uncertainty loomed large.
- Stuck at home, many people turned to day trading, seeking both entertainment and financial opportunities amidst the boredom and economic shifts.
- Central banks worldwide, including the Federal Reserve, slashed interest rates to near zero and injected unprecedented amounts of money into the economy. This “fiscal stimulus,” intended to cushion the pandemic’s economic blow, inadvertently fueled a bubble across various financial markets.
- Assets considered high-risk, like SPACs, cryptocurrencies, and meme stocks, experienced meteoric rises. The phrase “to the moon” became commonplace as speculative fervor gripped the markets.
- The surge in market activity also triggered a wave of M&A, IPO, and SPAC deals, leading to a hiring boom in investment banking, sometimes at the expense of traditional hiring standards.
It was in this volatile environment that the GameStop short squeeze unfolded. The story, as initially portrayed, was a David-versus-Goliath narrative: everyday retail investors on platforms like Reddit, specifically the Wall Street Bets subreddit, banded together to challenge Wall Street giants by driving up the stock price of GameStop (GME), a struggling video game retailer. Hedge funds like Melvin Capital had bet heavily against GameStop (a “short” position), and the coordinated buying by retail investors triggered a “short squeeze.” To limit their losses, Melvin Capital was forced to buy back GME shares, further pushing the price upwards.
This dramatic surge created paper wealth for many small investors, at least temporarily. However, the popular trading platform Robinhood controversially restricted buying of GME shares, causing the stock price to plummet. From its peak, GameStop’s stock price has since fallen dramatically.
While the media narrative celebrated this as a victory for the little guy, the reality, as financial experts pointed out, was more nuanced. Retail investors were a catalyst, but institutional investors and large trend-following funds played a significant role in the price surge. While Melvin Capital and Robinhood suffered reputational and financial damage, other large firms, like Citadel and Silver Lake, navigated the situation to their advantage.
Character Crossroads: Missing the Human Story in this “Money Movie”
The GameStop saga, while captivating, presents a narrative challenge for a “money movie”: it’s inherently a thin premise for a feature film. Traditional storytelling thrives on character arcs, where protagonists with flaws and strengths confront obstacles and evolve in pursuit of their goals. Think of Wall Street (1987), a classic money movie, where the dynamic between Bud Fox and Gordon Gekko, evolving from mentor-mentee to adversaries, forms the emotional core.
Dumb Money lacks this depth. Events simply unfold, driven more by market mechanics and social media buzz than by compelling character motivations. The central figure, “Roaring Kitty” (Keith Gill in real life), who ignited the GameStop frenzy, remains underdeveloped. His motivations – making money and “sticking it to the man” – are generic and lack specificity. By the film’s end, despite becoming significantly wealthier on paper, he remains largely unchanged as a character. The film attempts to elicit sympathy for him due to his grilling by Congress, but this feels somewhat unearned given the lack of prior character investment.
The antagonists – portrayed by Steve Cohen (Point72), Ken Griffin (Citadel), Gabe Plotkin (Melvin Capital), and Vlad Tenev (Robinhood) – are even less defined. Their portrayal feels almost cartoonish, reminiscent of stereotypical villains plotting in the shadows, with little screen time dedicated to exploring their actual motivations or complexities. The movie fails to convey why these financial titans were so concerned about GameStop and a group of online retail investors, given the vast scale of their financial empires.
Ultimately, Dumb Money falls into a common pitfall of many “money movies”: overemphasizing the financial mechanics at the expense of exploring the personal drives and emotional stakes of its characters. While focusing on money is inherent to the genre, a truly engaging “money movie” needs to connect the financial drama to relatable human stories. Without this emotional anchor, the narrative risks feeling superficial and detached.
Financials on Film: Accuracy and Accessibility in “Money Movies”
Dumb Money clearly aims to present a “Wall Street bad, retail investors good” narrative, a common trope in “money movies” that explore themes of financial inequality and corporate greed. While this perspective can be engaging, the film’s approach to explaining the underlying financial mechanisms is uneven.
To its credit, Dumb Money touches upon important concepts like “payment for order flow” and the deposit requirements of the Depository Trust & Clearing Corporation (DTCC), factors that directly impacted Robinhood’s decision to restrict GameStop trading. Including these details adds a layer of nuance that could have easily been omitted for simplicity.
However, the film falters in effectively explaining the interconnectedness of these elements and the key players involved. It’s questionable whether someone without prior financial knowledge would fully grasp the relationships between Robinhood, Citadel, GameStop, and Reddit solely from watching the movie. A dedicated “explainer scene” to clarify these connections – perhaps during the Congressional hearing sequence – would have significantly enhanced the film’s educational value. The Big Short, another successful “money movie”, masterfully employed such scenes to demystify the complex events of the 2008 financial crisis. Dumb Money misses an opportunity to provide similar clarity.
The movie also overlooks explaining the broader context of why so many retail investors were actively day trading during this period. The confluence of zero-commission trading apps, pandemic lockdowns, and the overall market bubble created a unique environment ripe for speculative trading, a crucial backdrop that the film only hints at.
Dumb Conclusions? Examining the Movie’s Takeaways
Towards its conclusion, Dumb Money presents several on-screen text statements that attempt to summarize the broader implications of the GameStop saga. These conclusions, however, are debatable and, in some cases, misrepresent the reality.
The movie suggests:
- Robinhood’s IPO failed due to the GameStop controversy and trading restrictions.
- The GameStop short squeeze revolutionized the financial industry, forcing hedge funds to monitor retail investor sentiment online.
- Collusion occurred between Robinhood and Citadel to limit GameStop trading.
- Melvin Capital collapsed because of GameStop and meme stock losses.
While point #4 is accurate – Melvin Capital did shut down due to losses exacerbated by the GameStop situation – attributing it solely to retail investors oversimplifies the fund’s vulnerabilities to short squeezes in general.
Regarding point #3, while leaked texts fueled speculation of collusion, a lawsuit alleging this was dismissed in court due to a lack of substantial evidence.
Points #1 and #2 are particularly contentious. Robinhood’s IPO performance was likely influenced by multiple factors, including its business model’s sustainability in a post-pandemic market, not solely the GameStop fallout. And while hedge funds undoubtedly pay attention to online sentiment, attributing a fundamental industry shift to the GameStop event exaggerates its lasting impact. Hedge funds and quantitative firms have long utilized internet data and monitored market trends; the GameStop saga may have heightened awareness, but it didn’t fundamentally alter these practices.
In essence, some of Dumb Money‘s concluding statements lean towards a romanticized interpretation of the GameStop story, potentially overstating the long-term consequences and lessons learned.
Final Verdict: Is “Dumb Money” a Smart “Money Movie” Choice?
Despite its flaws, Dumb Money isn’t a terrible film. It offers some genuinely funny moments and benefits from a strong cast delivering solid performances. However, underdeveloped characters and a somewhat superficial storyline relegate it to the realm of “mid-tier” entertainment.
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, a trip to the cinema might be a stretch unless you’re deeply invested in the GameStop narrative.
If you’re seeking an educational “money movie” that expertly explains complex financial concepts, The Big Short remains the gold standard. For a wildly entertaining “money movie” filled with excess, dark humor, and memorable characters, The Wolf of Wall Street is a superior choice. And for a blend of compelling drama, sharp writing, and insightful commentary on wealth and power (albeit in the world of media, but with strong financial undertones), Succession (while a TV series) surpasses Dumb Money in storytelling and depth.
The genre of “money movies” holds immense potential for exploring fascinating stories at the intersection of finance, human behavior, and societal forces. However, future films will need to build upon stronger narrative foundations and delve deeper into character motivations to truly resonate and leave a lasting impact, something Dumb Money, despite its topical subject matter, ultimately misses.
