Back in 2015,The Big Short proved that films about complicated financial systems didn’t have to be a snooze fest. So, armed with that same energy – and an equally starry cast, including Paul Dano, Pete Davidson, Sebastian Stan and Nick Offerman – Dumb Money is a dramatisation about the GameStop short squeeze that led to the tanking of a bunch of hedge fund traders back in 2021.
Ever quick off the mark, we’ve already had one Netflix documentary about the event (Eat The Rich: The GameStop Saga) and an HBO mini-series (Gaming Wall Street) but this time, we’re tackling it through the eyes of Hollywood, and the trailer gives us a taste of what to expect:
But what actually happened and how much of the film is based on real people and real events?
The backstory
Back in January 2020, some Redditors on the subReddit r/wallstreetbets noticed that the American gaming and electronic store GameStop was heading low at $3 a share, so the gang of amateur traders decided to start investing in it.
As the price of GameStop stock was still falling, it pricked the attention of Wall Street traders, who planned to engage in the practice of “shorting” the stock, that is, betting on it falling even further until it went out of business. In January 2021, the Redditors started buying up more shares, pushing the price of GameStop from $19.94 on 11 January to $347.51 just over two weeks later.
On January 25, the combined force of all these online GameStop champions saw more than 175 million shares of GameStop traded on a single day, the second largest total in the day according to the Dow Jones data, making some people who had bought shares potential millionaires.
The traders betting on GameStop tanking lost an estimated $6 billion due to the squeeze. They were not happy at all about this, leading some brokerages, like Robinhood, to ban the sale of GameStop on their platforms. Some folks cried about market manipulation, and it became a global and political issue discussed by the likes of Alexandria Ocasio-Cortez who questioned why, when it was outsiders – or those on lower-incomes – who pulled the same tricks as the finance world, was it suddenly framed as fraudulent? There were later lawsuits filed against some brokerages, and US governmental inquiries were set up to investigate what happened, and whether more regulation was needed for cases like this.
What is the film based on – and are they real people?
Dumb Money – directed by Craig Gillespie – is based on Ben Mezrich’s 2022 book, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees.
The main character, Keith Gill (played by Paul Dano), is based on the man of the same name who was a poster on r/wallstreetbets, chatting and giving tips under the name “DeepFuckingValue”. He also regularly posted on Twitter and YouTube as “Roaring Kitty”. As early as 2019, he was posting and argued that GameStop’s stock was undervalued, which prompted a bunch of other people to also invest in the company.
Gill, a financial analyst from Massachusetts, found that his analysis of the market was correct, and his original investment shot up to nearly $48 million. But the market goes both ways: he lost $15 million in one day at this time – but still likely ended up with millions in his brokerage accounts, so nothing to cry about really.
In February 2021, William Galvin, the Massachusetts Secretary of the Commonwealth, wrote to Gill's employer MassMutual (where he worked from 2019 to 2021) to investigate whether or not Gill or the company broke any rules related to his activities in promoting the GameStop stock.
Gill ended up testifying in court and said: “I did not solicit anyone to buy or sell the stock for my own profit”. In September 2021, MassMutual was fined $4 million by Massachusetts regulators for failing to supervise Gill's trading and online activity, however Gill claimed that these trades were just for three family members.
In October 2021, the Securities and Exchange Commission released a report that acknowledged that “people may disagree about the prospects of GameStop and the other meme stock” and it did not indicate that any market manipulation had occurred.
In an interview with The Wall Street Journal, Gill – who actually wears the red head bandana like Dano in the film – said he “wasn't a rabble-rouser out to take on the establishment, just someone who believes investors can find value in unloved stocks.”
Vincent D'Onofrio plays the real-life Steve Cohen, a hedge fund manager and owner of the New York Mets. Nick Offerman and Seth Rogen also play IRL money men: Offerman stars as Kenneth C. Griffin, majority owner of hedge fund Citadel and Rogen portraying Gabe Plotkin, founder of the Melvin Capital Management hedge fund. Rogen-as-Plotkin can be seen in the trailer lamenting the loss of $1 billion dollars on two consecutive days as a result of the GameStop saga: forgive us if our hearts aren’t breaking for you.
When is Dumb Money out?
It’ll be in cinemas from September 22, 2023.
