The new movie “Dumb Money” is about probably the only “David and Goliath” story in the history of the stock market. This true story required a series of highly unusual circumstances to happen at the same time to create an environment that enabled everyday average people (what the rich elite used to call “Dumb Money”) to destroy several billion dollar hedge funds and a few billionaires along the way. This all happened due to the attempt to short sell and put out of business one company GME (Game Stop).
When you short a stock, which means you are selling a stock you do not even own, you are hoping that the stock goes down so you can buy it back and make a profit. However if the stock goes up, or in the case of GME skyrockets, losses can theoretically have no limit. It is the massive shorting of GME, more than any other that changed the stock market forever.
The story of Dumb Money starts and ends with the main character Keith Gill, who in 2021 was a married man with one child and mostly unemployed. Gill used social media and mainly chat rooms on Reddit to talk about his stock purchases and early on, he risked most of his net worth to buy 50,000 dollars of GME stock that was priced less than 4 dollars at the time. All of the reasons why an average and lower middle-class person like Gill would risk so much money on a stock worth less than 4 dollars should have been researched more for this film. At one point later in the movie, Gill just states, “I like the stock”. Then Gill started a podcast and turned himself into a cat-like cartoon character and over weeks and months, the heavily shorted GME stock skyrocketed, only because of Gill’s popularity on Reddit.
At this same time, the new online and free brokerage service called Robinhood started a business. Then millions of Americans received their Pandemic checks, setting the perfect stage for an unprecedented stock market boom for GME and other shorted stocks that cost billions to several prominent hedge funds, with some of them going out of business due to their huge losses.
Unfortunately many people who were doing so well when GME was skyrocketing, missed their chances to get out with a profit, many of them losing money they could not afford to lose. One reason for this was when Robinhood was forced to prevent the selling and buying of GME stock for a period of time, due to pressure from hedge funds that were trying to stave off more losses.
The acting throughout this film is outstanding, starting with Paul Dano as Keith Gill, Pete Davidson as Keith’s brother Kevin, Seth Rogen as the head of hedge fund Melvin Capital Management Gabe Plotkin and Vincent D’Onofrio and Nick Offerman and hedge fund billionaires. Actress Shailene Woodley is also outstanding as Keith Gill’s wife, it was good to see her again in the release of a major new movie.
The Rotten Tomatoes ratings for Dumb Money are a very high 84% and I agree with this rating and recommend this movie all about the insanity of the stock market – the first very good movie of its kind since the “Big Short”, released in December 2015.
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