Making Sense of the GameStop Saga

Stonehill College recently hosted an exclusive film screening of Dumb Money in partnership with Sony Pictures Entertainment. Based on the true story of Stonehill alumnus Keith Gill ‘09, the movie chronicles his rollercoaster ride of retail trading GameStop’s stock to create one of the most infamous short squeezes in Wall Street history. 

Following the screening, John Duggan, interim dean of the Leo J. Meehan School of Business, moderated a conversation with Ben Mezrich, New York Times best-selling author of The Antisocial Network (which inspired Dumb Money), Professor of Finance Michael Mullen and Finance Department Chair Elif Sisli Ciamarra. The speakers provided valuable insights on the film’s themes and real-world implications.

There is Power in Community

The GameStop short squeeze happened during the height of the COVID-19 pandemic, but as Mullen shared during the post-screening discussion, the story actually started at Stonehill several years prior. 

“In the summer of 2017, Deb Salvucci, the former Dean of the Meehan School of Business, introduced me to Keith. Another student of mine was working on a financial database. The student showed Keith the stock that they were using as our template. That stock was GameStop,” said Mullen. 

Duggan shared that when the short squeeze was unfolding in real time, he received calls from Stonehill graduates. “Because of their expertise, alumni wanted to help him, asking me if I could put them in contact with Keith,” he noted. “I always say the best thing about Stonehill is community. We say that all the time. Our alumni are dedicated to our students. We build deep relationships here that last a lifetime.” 

Giving back was also a goal for Gill. “The first thing that Keith wanted to do when he made his money was to give money to the community. To build a racetrack. I think it is really telling. He wasn't out to just make money. That was a byproduct of what happened,” shared Mezrich. “There is such power in community. If you figure out how to harness that power, it can do good things.”

The Best Story Wins

Whether you are selling scripts or stocks, the best story always wins. Mezrich has come to appreciate this throughout his career as a storyteller. The author shared what elements of the GameStop saga got him hooked on telling the tale that eventually became The Antisocial Network.

“Like everyone else, I was at home watching GameStop go crazy. All of a sudden, I started getting all these emails from people saying this looks like one of your books is happening,” he said. “I got into the story because it wasn't an attempt to gamble on a stock—it was a lot of people stuck at home in a pandemic trying to take on Wall Street. It seemed like a David versus Goliath moment.”

Value is in the Eye of the BeHODLer*

During a congressional hearing examining the events around the meteoric rise of the GameStop stock, Gill testified on his own assessment of the value of the stock, “I believed the company was dramatically undervalued by the market. The prevailing analysis about GameStop’s impending doom was simply wrong.” 

In Mezrich’s own analysis of how perception shapes reality within the stock market, he said, “What Wall Street doesn't understand is that value has changed. It's no longer tethered to the fundamentals. The reality is the value of something is what we decide it is.” 

Yet, what remains true is that there is a fundamental agreement between two parties when a trade takes place, as Sisli Ciamarra explains. “There would be no trade if our opinions about the value of the thing didn’t differ. If I am buying, you are selling. If I am selling, you are buying, and the price reflects somewhat the collective reasoning of all of us,” she said.

As for Gill as he said again in again in the movie as well as in his congressional testimony, “In short, I like the stock.” 

*HODL is a finance slang term meaning to buy-and-hold. It implies not selling when stock prices become volatile. The term is featured throughout the film.