When retail investors on a subreddit known as WallStreetBets decided to take on the titans of finance at their own game by buying up shares of GameStop and pushing the stock to the moon in January 2021, the financial order was upended — if only for a moment.
Now, the movie that tells the tale, “Dumb Money,’’ — whose title is based on the pejorative term for retail investors — has finally hit the big screen, opening in several cities last weekend. The Hollywood version of events, however, glosses over inconvenient facts in its effort to bolster the class revenge story, whose heroes include a young investor with the improbable avatar of “Roaring Kitty,” as well as a nurse, a GameStop mall store employee, and two University of Texas students.
The setup comes early on as Keith Gill, aka Roaring Kitty and played by Paul Dano, insists that “Wall Street can get it wrong,” which he reminds the audience was proved by the crash of 2008, as he makes his pitch for GameStop. The financial crisis hovers in the background here; it’s one reason the protagonists can’t get high-paying jobs or are mired in student debt, resorting to gambling on stocks via the Robinhood trading app as their only hope for financial freedom. At one point, the CEO of Robinhood Markets, Vlad Tenev (played by Sebastian Stan), even tries to defend his firm by saying it “came out” of the Occupy Wall Street movement. After all, the Robinhood app offers commission-free stock trading, enabling the hoi polloi to buy and sell equities, options (and even crypto) simply by pressing a button on their smartphones.
The Redditors began targeting Melvin Capital in the fall of 2020 once they realized the hedge fund was short GameStop. It wasn’t a secret — Melvin had disclosed its listed GameStop put options in filings with the Securities and Exchange Commission as far back as 2014. As Melvin founder Gabe Plotkin (Seth Rogen) explains in the film, he viewed GameStop as a Blockbuster in waiting, meaning it would eventually go bankrupt. That fate seemed quite possible, as the closure of GameStop’s brick-and-mortar stores during the pandemic helped drag the stock down below $2 per share by the summer of 2020. Many short sellers agreed, and by January 2021, short sales accounted for more than 100 percent of the outstanding float
Of course, the bad guys in the movie are Plotkin and the hedge fund honchos who bailed out Melvin — Citadel’s Ken Griffin (Nick Offerman) and Point72 Capital’s Steve Cohen (Vincent D’Onofrio) as well as Robinhood’s Tenev. (“Fucking criminal bastards” is one way the Reddit crowd describes them.)
Plotkin, whose firm was bleeding billions, comes off as shell-shocked and clueless — he was planning to sit in front of his wine collection while giving his remote testimony for a House Financial Services Committee hearing until his PR advisers convinced him it was a bad idea. Meanwhile, Cohen’s lines in the film are mostly profanity-laced attacks on Griffin, whom he calls an “asshole” more than once. Tenev is seen trying to distract the media by giving a reporter a scoop about its upcoming IPO while the steely-faced Citadel founder, first seen having lunch at the Four Seasons, is mostly taciturn.
For my full review, please click here: https://www.institutionalinvestor.com/article/2c7zjzn0fxoi2mbw837cw/culture/the-enduring-lessons-of-dumb-money
Michelle Celarier 