Dumb Money: The Wild True Story Behind The GameStop Stock Saga

The new film starring Paul Dano is based on the real-life Reddit trader who played Wall Street at their own game.
Pete Davidson and Paul Dano in Dumb Money
Pete Davidson and Paul Dano in Dumb Money

You can always count on Hollywood to jump on a major cultural event and give it the big-screen treatment – even ones which have seemingly only just happened.

The new comedy-drama Dumb Money is the latest major film release to be inspired by true events, recounting the whirlwind that was the GameStop short squeeze in 2021 when people flocked to buy stocks in the US video game store.

Described as the “ultimate David vs. Goliath tale”, the film is based on Ben Mezrich’s 2021 book The Antisocial Network and is directed by Craig Gillespie (whose recent work includes I, Tonya and the miniseries Pam & Tommy).

Dumb Money stars Paul Dano, Pete Davidson, America Ferrera, Nick Offerman, Seth Rogen, Sebastian Stan, Shailene Woodley and a host of other A-listers, and tells the true story of the people who “flipped the script on Wall Street” by turning GameStop stocks into a hot investment, leaving hedge funds out of pocket by billions.

Here’s everything you need to know about the wild true story behind the film…

The GameStop short squeeze really happened in 2021

The GameStop saga originated in the online forum Reddit, when users in the subreddit r/wallstreetbets unexpectedly flooded the market by purchasing shares in a low rating company.

Paul Dano as Keith Gill
Paul Dano as Keith Gill

According to The Verge, one of the first people to tip off amateur traders about GameStop – the American high street video game and electronic store – as far back as 2018 was a user with the screenname delaneydi. He argued that the company was actually being underpriced by the market.

In January 2020, GameStop was valued at just $3 (£2.46) a share. Once users in r/wallstreetbets realised that the stock was, indeed, undervalued, they began investing in it. This started off as something of a joke, but the idea quickly gained traction and became a way to hit back at the rich.

That was because this is was all happening while hedge fund traders were shorting the stock – meaning they were borrowing shares and selling them on, with the intention of buying them back at lower prices. In other words, they were betting on it to fail.

The following year, Reddit users and online traders kept the momentum going, and created a viral buzz around the stock – with even Elon Musk sharing a link to the subreddit with the caption “Gamestonk!!” which continued to increase in value and rise to a record high of $483 (£398) in January 2021. GameStop was now not only a real financial investment, but it had become a meme-able currency.

Additionally, not only was this a chance to have “rich dudes pissing in their pants”, as Dumb Money describes it, but momentum accelerated when there were actually promises of huge returns for investors.

How did this impact Wall Street?

Seth Rogen plays real-life businessman Gabe Plotkin in Dumb Money
Seth Rogen plays real-life businessman Gabe Plotkin in Dumb Money
Lacey Terrell

Among all this crazy amateur trading, the New York stock exchange came to a halt nine times. While a short squeeze is always associated with a degree of risk, short sellers lost a total of $6 billion (£4.9 billion) in this particular squeeze, according to Bloomberg.

That’s because the traders who were deliberately inflating the GameStop price forced hedge funds to lose money by keeping them caught in the short squeeze.

Notably, the American financial services company Robinhood blocked sales of the stocks on their platform, leading to uproar and claims of “market manipulation”.

Melvin Capital was another hedge fund that took a huge loss during the whole saga, and culminating in it shutting down last year.

Who was the real person at the centre of it all?

Keith Gill gained online notoriety in 2021
Keith Gill gained online notoriety in 2021
SOPA Images via Getty Images

Paul Dano plays real-life former financial analyst Keith Gill in Dumb Money. Gill is known to his online followers as Roaring Kitty on YouTube, and DeepFuckingValue on Reddit.

He was the guy at the centre of the GameStop short squeeze after he invested $53,000 (£43,550) of his life savings into GameStop in 2019, when it was still at just $5 (£4.11) a share.

Gill’s reasoning for doing this was that he also believed GameStop was undervalued, and had potential to reinvent itself. He helped build the hype around the stock when he urged his followers to invest, which helped drive up the price – thus leaving very, very rich hedge funds short after they were counting on it to fail.

He was later called to testify in front of the US House Financial Services Committee about his role in the short squeeze.

“I believed the company was dramatically undervalued by the market. The prevailing analysis about GameStop’s impending doom was simply wrong,” he said in his testimony. “My investment skills had reached a level where I felt sharing them publicly could help others.”

What was the reason for the whole saga?

Shailene Woodley and Paul Dano in Dumb Money
Shailene Woodley and Paul Dano in Dumb Money

A key factor as to why the GameStop episode played out the way it did was because it took place during Covid-19, meaning more people were online and motivated by the viral frenzy and, of course, FOMO (fear of missing out).

It also became a statement about the “little guy” standing up to Wall Street, when many people who have little to no experience with stocks and trading decided to get involved.

“A lot of people feel the system is broken,” Paul Dano’s character says in the trailer. “The whole idea of the stock market is if you are smart and maybe with a little luck you can make your fortune – certainly not anymore. There’s no hope for the little guy… Maybe now there is.”

However, Gill did later insist that he “wasn’t a rabble-rouser out to take on the establishment, just someone who believes investors can find value in unloved stocks”.

Gill also told lawmakers that he was “abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks”.

Keith Gill testifying during a virtual hearing on GameStop in Washington, in February 2021
Keith Gill testifying during a virtual hearing on GameStop in Washington, in February 2021
via Associated Press

Since the GameStop drama, calls for more regulation in the industry have been made. But besides the drafting of a few bills, there’s been little change.

Oh, and if the whole thing sounds familiar, it’s because you might be spotting parallels with Adam McKay’s Oscar-winning The Big Short starring Steve Carell, Christian Bale, Ryan Gosling and Brad Pitt.

Dumb Money is in cinemas now. Watch the trailer below:


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