In early 2021, a seemingly ordinary group of traders, led by a Massachusetts resident known as Roaring Kitty or DeepFuckingValue, embarked on a mission that captured the world’s attention. Their target: GameStop, a struggling video game retailer that was on the brink of obsolescence. The narrative was simple but compelling – a band of underdogs taking on the Wall Street giants and emerging victorious, exposing the flaws in our financial system. It was a story that made its way to the hallowed halls of Congress and seemed destined to change the game for good.
Fast forward two and a half years, and the GameStop story has evolved into something far messier than that initial narrative. GameStop is still grappling with its woes, and Wall Street, for the most part, remains unscathed. Roaring Kitty, the enigmatic leader of the movement, has largely vanished from the spotlight.
This complexity is the backdrop against which the movie “Dumb Money” unfolds, hitting theaters this month. Directed by Hollywood, it presents an exhilarating dramatization of the GameStop saga, capturing the essence of those heady days. However, it also underscores that the real story is far from clear-cut.
The film aligns its characters into two distinct camps – the Davids and the Goliaths. At the forefront is Keith Gill (played by Paul Dano), the real-life GameStop devotee who became the face of the 2021 storm through his YouTube videos touting the stock. His online antics, including a video where he humorously dips a chicken tender into a glass of champagne as GameStop’s stock soars, are brought to life.
On the other side are fictional Davids, including a nurse, college students, and a GameStop employee struggling with an unhelpful boss. The Goliaths are portrayed by real-life figures: Gabe Plotkin of Melvin Capital, Steve Cohen, Ken Griffin of Citadel, and Vlad Tenev, co-founder of Robinhood, where much of the GameStop action took place.
As GameStop’s stock price surged, so did the film’s intensity. Plotkin, who had bet against GameStop, faced a short squeeze, causing significant losses. Retail investors celebrated paper gains, and Roaring Kitty’s followers proudly proclaimed their “diamond hands” by refusing to sell. Then came the controversial moment when Robinhood restricted trading, a decision that continues to be questioned. Finally, the major players, including Keith Gill, were summoned to testify before Congress.
“Dumb Money” culminates in a triumph for the Davids over the Goliaths, portraying most individual investors as financial victors. While Keith Gill’s exact gains are not disclosed, he hints at success by buying his brother a new car. Interestingly, Keith Gill, who inspired the film, did not participate in its creation and has remained largely silent.
In an interview about “Dumb Money,” co-writers Lauren Schuker Blum and Rebecca Angelo emphasized their intention to capture the “collective effervescence” of the GameStop saga, a moment when people united in excitement and action, channeling internet populism onto the big screen.
Undoubtedly, the film succeeds in capturing the mood of the GameStop frenzy. The rapid ascent of a declining mall retailer’s stock, driven by Reddit enthusiasts, was indeed a wild and captivating spectacle. It was fun to witness Wall Street insiders and CNBC pundits grappling with the phenomenon. However, beyond the exhilaration, the film also prompts a closer examination of the broader implications.
It’s essential to remember that the GameStop saga was not a one-sided victory. Some everyday investors profited handsomely, while others incurred losses. For instance, Kim Campbell, a nurse featured in the film, acknowledged that she was not in the black despite holding onto her GameStop shares, showing the challenges many faced.
The underlying sentiment driving GameStop and similar movements is a genuine frustration with income and wealth inequality and a financial system that often seems stacked against the average person. However, investigations into the GameStop saga did not unearth significant wrongdoing by Robinhood, Citadel, or others involved. As author Ben Mezrich noted, “You don’t have to break the law for the system to be rigged.”
The film’s triumphalism, while emotionally resonant, requires scrutiny. Playing the stock market may offer opportunities for financial gain, but it does not inherently challenge or transform the system. Retail investors, by and large, are seeking profits, not system overhaul. The stock market, with its complexities and intricacies, remains an arena where the odds are often stacked against small investors.
While the initial GameStop short squeeze may have rattled institutional investors, the element of surprise that played a crucial role in that episode has since diminished. GameStop’s journey, post-2021, has been far from a fairy tale. Despite high hopes and the influence of Ryan Cohen, the co-founder of Chewy, GameStop’s business struggles persist, with leadership changes and mixed financial results.
In conclusion, the GameStop saga was a remarkable and unexpected moment in financial history, but its lasting impact remains uncertain. The film “Dumb Money” provides a captivating narrative, but it serves as a reminder that the financial world is far from black and white. The challenge of leveling the playing field for retail investors in the stock market persists, but it requires more than a short-lived frenzy.
Ultimately, GameStop’s story, while captivating, may end up as a mere paragraph in the annals of financial history, rather than a transformative chapter. While retail investors may have scored a brief victory, the financial system, for better or worse, endures.