The past year has been an astounding one for the world of cinema, with the release of movies such as Barbie and Oppenheimer. In this mix were also a few financial films. The one that I will discuss today is Dumb Money, the film about the GameStop Scandal.
First, covering what happened with the Gamestop Stock. In 2021, the "Gamestock Scandal Occurred" it shook Wall Street and magnified the inequality between institutional and real-time investors. It all began when Keith Grill started to chat up a storm about the stock gamestop on forums like Reddit and Wall Street Bets. Gamestop was a stock which was being shorted by many institutional investors; these included large banks and well-known funds on Wall Street. Shorting means taking a bet that the stock price will go down. However, the risk with shorting is that if the stock goes up, the investors must pay multiples of what they spent first to purchase it. These Reddit investors, led by Keith Grill, noticed the high level of short interest and decided to do what's called a "Short squeeze." This is when a situation occurs in which the price of a stock rises to such an extent that investors who have sold short purchase the stock to limit their losses, causing the price to increase further. These Reddit investors started rapidly buying the stock, driving up the share price and successfully completing their planned short squeeze. This left institutional investors reporting record losses by the day and the media creating a spotlight on this historic moment. However, what happened next would be severely controversial; platforms where these Reddit investors were trading, one of the large ones being Robin Hood, restricted stock trading. Regulatory bodies like the SEC raced into investigation over these immoral actions While I won't spoil the rest of the ending for those who have not watched the movie it is important to know that a full investigation occurred into this incident.
Now, onto the film review. Did they accurately depict it all? The film was true in representing the framework of the entire scandal. However, Hollywood took some creative liberties. The first significant one is that when the investigation occurred, the film presented that the lead, Keith Gill, could possibly face prison when, in reality, this was never on the table as he was never in the wrong. Another key point that should have been mentioned was the other investors involved in Gamestop. While I won't list them all, one that stood out to me was Michael Burry, who predicted the Wall Street crash of 2008 and inspired the movie The Big Short. Finally, and most importantly, the film portrayed the retail investors as successful in this trade; however, this is not the case. Most of the retail investors lost money; the only ones who gained profit were the lucky individuals who invested early. This is a much sadder reality of an ending than the film presented. Overall, the movie presents many more small inconsistencies, yet it provides a clear image of the scandal.
In conclusion, Dumb Money is a great film that, although Hollywood took some creative liberties, presented a decently accurate portrayal of real-life events. I highly recommend this movie as it is funny, engaging, and even educational!
By Annika Bjerregaard. Edited by Annika Bjerregaard & Aurore Lebrun.
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