In the new movie “Dumb Money,” the primary actors responsible for the 2021 GameStop stock spike are followed. In an unprecedented event in trading, retail traders fueled by the subreddit r/WallStreetBets collectively raised the stock to a whopping $483 per share, allowing regular people like Keith Gill, played by Paul Dano in the movie, to make millions while costing some hedge funds billions.
The David against Goliath incident was unprecedented on Wall Street and gave rise to the term “meme stock.” Robinhood, an investment software established by Baiju Bhatt and Vlad Tenev that enables users to purchase stock with a finger, made the event possible.
Robinhood CEO Tenev was a billionaire on the eve of announcing an IPO in the run-up to the GameStop short squeeze.
But then came the unexpected surge. r/WallStreetBets was abruptly shut down, and thousands of ordinary traders sold their shares, assuming the stock had hit its high. However, as users attempted to cash out their millions, Robinhood needed more collateral to pay its clients. As the movie describes, Robinhood panicked and shut off GameStop’s trading.
Tenev, played by Sebastian Stan in the movie, was chastised for his choice, and the company was hit with scores of lawsuits accusing it of market manipulation.
Tenev spoke before the United States House Committee on Financial Services a month after the trading ceased in 2021, and he was chastised for not offering clear answers to several issues.
Vlad Tenev says ‘Dumb Money’ is all ‘fiction’
Tenev has continued with Robinhood after the GameStop debacle. He is still the company’s CEO and is attempting to dissociate the company from what occurred in 2021 by adding new features to the app, such as retirement choices and 24-hour trading.
Tenev recently told the Wall Street Journal that he hasn’t watched “Dumb Money” and hasn’t been approached about it. But he has some ideas on the subject.
“Having a movie created that has Robinhood featured is a really important testament to our impact,” he said. “But you must remember, the movie’s fiction and nobody talked to us about it, so I’m expecting it to be a fictional account.”
The movie does, however, illustrate several unquestionable realities
Did Robinhood really have the worst IPO debut ever of its size?
Yes. When Robinhood issued its IPO in the summer of 2021, it had the worst debut ever for a company of its size, according to a title card at the movie’s end.
The stock sank 8.4% on the first day of trading, closing at $34 per share. By the end of the first day of trading, Robinhood’s market value was over $29 billion. It was expected to be valued at $35 billion.
Among 51 US startups that raised as much cash as Robinhood or more, Robinhood had the poorest first-day performance ever.
Vlad Tenev, CEO of Robinhood, poses in front of a window overlooking New York City.
Is Vlad Tenev no longer a billionaire?
It is said at the end of “Dumb Money” that he had lost his billionaire status, which is true.
Since becoming public, Robinhood’s stock has dropped 60% to $14 per share by January 2022.
According to Forbes, Tenev’s net worth is $845 million as of 2022. His net worth peaked at $4.3 billion.
