To understand the Dumb Money movie and the semantics of the GameStop short squeeze, it's important to first understand what it means to short a stock (in this case GameStop). Due to the rise of video games being purchased digitally and people not going into retail stores as much during the COVID-19 pandemic, some people believed that GameStop was headed for a decline value. Then, in early January 2021, a change in leadership at GameStop caused the stock to rise somewhat, but the big hedge fund managers believed the optimism was overinflated and viewed it as the perfect time to short the stock. Basically, this means that an investor borrows the stock, sells it on the open market, waits for the price to fall, then buys it back at the lower price and pockets the difference after repaying interest on the initial loan (stock that they borrowed).
Yes. As indicated in the Dumb Money cast vs. real people section above, Keith Gill indeed has a brother named Kevin Gill. In a Facebook post at the time of the market rally around GameStop, Kevin commented, "Um yeah. So my brother is kinda famous now."
Gill had been the first in his family to graduate from a four-year college, earning a degree from Stonehill College in Massachusetts. A track and field star in college, he graduated in 2009 during the financial crisis and struggled to find permanent employment. Just prior to gaining widespread notoriety and making millions during the GameStop short squeeze, Gill had been working in "a marketing and financial education" position at the large insurance company MassMutual, a job that he'd held since 2019. "My job was to help develop financial education classes that advisors could present to prospective clients," he told the U.S. House Committee on Financial Services. "I was not a stock broker or a financial advisor. I did not talk to clients, and I did not recommend stocks for them to buy. Before and after I joined MassMutual, I studied and followed stocks. One of those was GameStop."
Yes. Keith Gill had married his wife Caroline in 2016. A Dumb Money fact-check confirms that like in director Craig Gillespe's movie, they had a 2-year-old daughter at the time of the GameStop market rally that Keith helped facilitate. He did so through analysis he presented in videos on his Roaring Kitty YouTube channel and posts on Reddit's WallStreetBets subreddit under the user handle "DeepF***ingValue".
Yes. Keith told the U.S. House Committee on Financial Services, "We had an incredibly difficult 2020; most difficult was the tragic and unexpected loss of my sister Sarah in June. I am grateful to be in a position to give back to, and support, my family." Keith's sister Sarah left behind three children, who, according to the Daily Mail, were taken in by their grandparents (Keith's parents).
In researching the question, "How accurate is Dumb Money?" we learned that by January 26, 2021, GameStop had become the single most traded stock in the U.S. stock market, with volumes equal to the five biggest tech companies combined. A ColdFusion documentary pointed out that GameStop's share price had risen from just a few bucks in 2020 to a peak of more than $400. The company, which had been valued at 200 million in April 2020, was now worth more than $28 billion.
To be exact, the subreddit r/wallstreetbets' Discord forum was banned on January 27, 2021. The company claimed that users had violated their policies on hate speech, an infraction that most users believe is far from the actual reason the board was blocked.
Yes. Like in the GameStop stock scandal movie Dumb Money, the stock trading platform Robinhood faced heavy criticism and class-action lawsuits for temporarily halting the buying of GameStop stock and other securities on January 28, 2021. Robinhood wasn't the only brokerage firm to halt buying and only allow selling of GameStop. Several others took the same action, claiming they restricted buying because the clearing houses had raised the required collateral for executing trades and it would take time to provide the increased collateral to the clearing houses. According to them, more collateral was required because the large trading volumes in certain stocks, including GameStop, "generated substantial risk exposures at firms that clear these trades [...] particularly if the clearing member or its clients are predominantly on one side of the market" (Financial Times).
No. Reddit's WallStreetBets group noticed that other companies were being heavily shorted as well, including Nokia, AMC Theaters, BlackBerry, iRobot Corporation, and a number of others. They made coordinated attacks to elevate those stock prices as well. -ColdFusion
For the most part, no. Other than being very loosely inspired by the real-life people who were following Keith Gill's Reddit and YouTube posts, the small-time investors (aka "Dumb Money") in the GameStop stock movie are fictional. This includes the nurse, Jenny Campbell (America Ferrera); the GameStop employee, Marcus Barcia (Anthony Ramos); and college students Harmony Williams (Talia Ryder) and Riri (Myha'la Herrold).
While exploring the Dumb Money fact vs. fiction, we discovered that Massachusetts native Keith Gill (portrayed by Paul Dano), who posted in the subreddit r/wallstreetbets, turned a $53,000 investment in 2019 into one that peaked at $48 million during the rally. Though the GameStop stock fluctuated wildly, Gill still made tens of millions in the end, while hedge funds that were short GameStop when the chaos began lost tens of billions. By January 28, 2021, the hedge funds and short sellers had lost $70 billion. In all, approximately 5,000 U.S. firms had been affected. -ColdFusion
Yes. Gill and the GameStop short squeeze drew the attention of lawmakers and the Securities and Exchange Commission (SEC), which oversees the stock market. On February 18, 2021, Gill testified before the U.S. House Financial Services Committee during a virtual hearing. "I did not solicit anyone to buy or sell the stock for my own profit," he stated, telling the committee that he simply liked the stock and believed that it had been undervalued, citing two main factors for his reasoning. The first was that he believed the market was "underestimating the prospects of GameStop's legacy business and overestimating the likelihood of bankruptcy." The other was that he felt that GameStop could create new revenue streams by pivoting into the digital realm as a "technology-driven business" that embraced the digital economy.
While many people believe that the little guy beat out the Wall Street titans, the true story reveals that wasn't exactly the case. Larger trading professionals joined the rally as well and grabbed up GameStop stock while it was soaring in value and then sold it days later. Black Rock and eight other Wall Street giants made a combined total of $16 billion on the GameStop short squeeze.
"During COVID, one of my sons, my youngest son, who was 24 at the time, was living with us, like a lot of people," said Gillespie, "and he was involved in the WallStreetBets, and all the way through, from very early on. So I was living with him, and it got, obviously, very intense during that two-week period, trying to time the options, and that intensity, like, literally every three minutes, trying to figure out when to sell, when to get out. Just all the conversations happening online, and then the frustration with the crash, with Robinhood, with the freeze, with WallStreetBets being shut down, the outrage that was happening online, I got to see it all firsthand through his eyes, so that was my touchstone as I was making this movie. Seeing just how intense this situation was, and the stakes that were involved for so many people, that's what drew me to the project." -LRM Online