DUMB MONEY is what the financial world of hedge funds calls the money of small investors which is floating around on the stock market but does not seem to play a significant role. In the winter of 2020, the worst year of the Covid pandemic, when there were still no vaccines and the number of deaths kept rising, a number of small investors came to an agreement via Reddit and Twitter and invested their money in shares of the computer game retail chain “Gamestop.” It had previously become known that a hedge fund attempted to “short sell” the stock, meaning to bet on the falling value of the stock.

Craig Gillepsie (I, TONYA) has made a film about the Gamestop affair, with Paul Dano as internet investment guru Keith Gill alias “Roaring Kitty,” who triggered the Gamestop run. Gill invested around 50,000 dollars in Gamestop because he thought the stock was undervalued, but the real run was caused by the Reddit thread r/wallstreetbets, where users called for people to get back at the short sellers who ruin companies (and, in the Asian financial crisis of 1997, apparently also the stock exchanges and economies of Thailand, Philippines, Malaysia, South Korea, and Indonesia) by speculating on falling prices. The Gamestop share rose to incredible heights and small investors who sold at the right time made colossal profits. Others lost money. A hedge fund went bankrupt. The film tells the story of Keith Gills and three small investors and blames the conspiracy between the Financial Control Authority, the trading platform “Robinhood,” and the fund managers for the eventual collapse of the stock. The fact that “meme shares” and betting on companies in financial difficulty are very risky investments stays rather hidden by using the myth of mass rebellion targeting the financial market, but the kind of power funds have beyond the regulations does become clear.

Tom Dorow

Translation: Elinor Lewy