Well, actually: Our ‘Dumb Money’ movie review

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Ethan Wu (0:36)

Thank Pushkin.

Remember GameStop? Back in 2021, that Game Store stock turned into a huge retail investor phenomenon. Everyone on Reddit, on Twitter is talking about Diamond Hands and holding on for dear life and going to the moon. Well, that entire saga has just been made into a movie. It's called Dumb Money. It's just out in the US, coming out in the UK very soon. And on the show today, we want to talk about this movie, what it gets right, what it gets wrong, and whether the meme stock moment was a revolution. This is Unhedged, the markets and finance show from the Financial Times and Pushkin. I'm reporter Ethan Wu here in the New York studio, joined by my boss, Robert Armstrong, and remotely, Alexandra Skaggs of Alphabet.

Hey, not bad. So Alex, you and I have watched the movie, and Rob has not, but that has never stopped Rob from...

Robert Armstrong (1:32)

Ignorance is no impediment to comment. That's the first law of journalism.

Ethan Wu (1:37)

That's the first thing I learned working at the FC. But let's just give a brief plot summary, right? Just broad strokes, it follows Keith Gill, also known as Roaring Kitty, also known as Deep F-ing Value on Reddit. It's this dude who works as a financial analyst somewhere in Massachusetts, and he developed a thesis that GameStop was undervalued, people were overestimating how much damage the digital transition in gaming would do to GameStop, and he started posting his balance sheets and his long thesis on GameStop publicly on Reddit. He would do YouTube videos, he would do live streams, and it caught on.

People started buying the stock, it goes up. So the movie is largely centered on Keith Gill and a couple of other retail investors, but it also follows these hedge fund masters of the universe, notably Gabe Plotkin, CEO of Melvin Capital, which was the main casualty of this entire saga, got squeezed by these retail investors in GameStop, and Ken Griffin, CEO of Citadel and Citadel Securities, who is a noted villain in this entire story and is widely hated by the Reddit crowd.

Robert Armstrong (2:39)

Let me just step in here on behalf of our listeners who might not be totally clear what a short squeeze is.

So when you trade a stock short, what you do is borrow a stock. It's a little complicated, but the point is this, if the stock goes the wrong direction and goes up, I'm losing money because I have an obligation to buy the stock again and return it. That's called a short squeeze. And the reason it's called a squeeze is if people get wind of the fact that I owe Ethan this stock, they might decide to just torture me a little bit by bidding up the stock knowing that I'm not going to be able to make good on my commitment.

Ethan Wu (3:20)

And that's something, Rob, I think the movie actually portrays really well as Gabe Plotkin, Melvin Capito guy sweating as his hedge fund gets squeezed. Alex, were there any things that stood out to you in the movie that you liked before we get into things that we did not like?

Alexandra Skaggs (3:32)

I thought it was really entertaining.

Ethan Wu (3:33)

Yeah.

Alexandra Skaggs (3:34)

And also I thought that the hedge fund managers were weirdly charming because they have these like big name actors playing them and like really chewing up the scenery. So that was fun too.

Ethan Wu (3:43)

Yes, Seth Rogen plays Gabe Plotkin, I thought did a great job.

I really liked their integration of social media. Like as a finance movie, it's a little questionable, but as a movie about social media, I think it's excellent. It shows virality and kind of the coordinated group think intermediated through the internet very well. It's usually when 30, 40 year old screenwriters are writing about TikTok, it's like truly agonizing to watch, but this was funny.

Robert Armstrong (4:05)

Oh, it'd be 30 or 40 again.

Ethan Wu (4:08)

It won't take that to the first round. That's enough praise. That's enough praise, too much praise. We had three main gripes with Dumb Money. The first was about payment for order flow. Are ordinary retail investors getting screwed by the big market makers and hedge funds?