The new movie "Dumb Money" follows the main players responsible for the GameStop stock surge in 2021. In an unprecedented event in trading, retail traders fueled by the subreddit r/WallStreetBets collectively raised the stock so high that it was eventually trading at a whopping $483 per share, leading regular people like Keith Gill, played by Paul Dano in the movie, to gain millions while costing some hedge funds to lose billions.
The David versus Goliath event had never been seen on Wall Street before and birthed the phrase "meme stock." The event was made possible by Robinhood, an investing app created by Baiju Bhatt and Vlad Tenev that allows users to buy stock with a simple swipe of a finger.
In the lead-up to the GameStop short squeeze, Robinhood CEO Tenev was a billionaire and on the verge of launching an IPO.
But then the unprecedented surge happened. Suddenly, r/WallStreetBets was shut down, and tons of retail traders were selling their shares, believing the stock had hit its peak. But while users were trying to cash in on their millions, Robinhooddidn't have the collateral to pay out their clients. So, as the movie depicts, Robinhood shut down the trading for GameStop in a panic.
Advertisem*nt
Tenev, who is played by Sebastian Stan in the movie, faced criticism for the decision andRobinhood was hit with dozens of lawsuits accusing the company of market manipulation.
A month after halting the trading in 2021, Tenev testified before the United States House Committee on Financial Services and came under fire for not providing clear answers to a number of questions.
Vlad Tenev says 'Dumb Money' is all 'fiction'
Since the madness of GameStop, Tenev has pushed forward with Robinhood. He is still the company's CEO and is trying to distance the company from its association with what happened in 2021 by offering new features to the app like retirement options and 24-hour trading.
In a recent interview with the Wall Street Journal, Tenev said he has not seen "Dumb Money" and was never contacted about it. But he has some thoughts on it.
Advertisem*nt
"Having a movie created that has Robinhood featured is I think a really important testament to the impact we've had," he said. "But you have to remember, the movie's fiction and nobody talked to us about it so I'm expecting it to be a fictional account."
However, there are some truths the movie highlights that can't be disputed.
Did Robinhood really have the worst IPO debut ever of its size?
Yes. As the movie notes in a title card at the end, when Robinhood launched its IPO in the summer of 2021, it had the worst debut ever for one of its size.
On the first date of trading, the stock fell 8.4% ending the day at $34 a share. Robinhood's market capitalization was around $29 billion by the time trading closed that first day. Its anticipated valuation was at $35 billion.
Advertisem*nt
Robinhood had the worst opening-day performance on record among 51 US companies that raised as much cash as Robinhood or more.
Is Vlad Tenev no longer a billionaire?
The end of "Dumb Money" states that he's lost his billionaire status, which is true.
Related stories
Since Robinhood went public, its stock fell 60% by January 2022, down to $14 a share.
Tenev's net worth is $845 million as of 2022, according to Forbes. At its peak, his worth was $4.3 billion.
