Remember those great cameos in “The Big Short,” when the likes of Selena Gomez, Margot Robbie and the late Anthony Bourdain would break the fourth wall to explain arcane terminology such as synthetic collateralized debt obligation? The three-part Netflix documentary series “Eat the Rich: The GameStop Saga” takes a similar approach in explaining the GameStop stock phenomenon — not via splashy cameos by big celebs, but with a straightforward and clear and entertainingly breezy approach that follows the bouncing stock prices in one of the most bizarre financial stories of our time.
As Denzel Washington’s Joe Miller in “Philadelphia” would put it, they explain it to us like we’re 6-year-olds, and somehow make sense out of the David vs. Goliath battle pitting a group of smart, subversive, motivated Reddit users against Wall Street giants. Through an entertaining mix of interviews with hedge fund managers, journalists and retail investors who explain the phenomenon from different sides, augmented by a steady stream of clear and concise graphics and clips of often hilariously clever viral videos, “Eat the Rich” walks us through the madness of the GameStop story, and we come out on the other side understanding what happened.
Well. Most of what happened.
The GameStop story has been told in a couple of previous documentaries and will be given the fictional treatment in the upcoming feature “Dumb Money,” starring Seth Rogen, Pete Davidson, Sebastian Stan and Paul Dano. In this entry, Director Theo Love takes us through the timeline and around the country (using Google map-type graphics) to tell the story, which starts in 2020, with Jim Cramer of TV fame waking up after being sidelined for a week after back surgery, learning to his amazement GameStop was soaring and jumping on the phone to proclaim on CNBC, “There isn’t anyone involved with GameStop who would accept the fact that this company should be at $338. … Take the home run, don’t go for the grand slam! You’ve already won! You’ve won the game!”
Cramer thought he was doing investors a favor, but he quickly became the target of a thousand memes and a zillion trolling comments. “I don’t even understand what I did,” says Cramer. “What’d I do? What is their mission? What are they determined to do, change the face of capitalism?”
This is a common theme throughout the series: the older establishment, including hedge fund managers, traditional wealthy investors, TV commentators and eventually Congress, didn’t understand what they were up against, i.e., a group of retail investors aka day traders who congregated on Reddit and used the app Robinhood to make their investments. In the eyes of heavy hitters such as Gabe Plotkin, the founder of Melvin Capital Management who had placed a $400 million short bet on Nintendo, creaky old GameStop (which specialized in reselling used video games) was going to become the next Blockbuster or Sam Goody. The short sale was on. (As Bob Sloan, founder of S3 Data Partners, explains, “Shorting is just a way of saying we think the stock price will go down.” They’re betting on the failure of companies.) What the giants didn’t envision was an attack of sorts from an army of Reddit users who had other plans.
We meet retail investors such as Eddie Koo of Englewood, New Jersey, a family man who was trying to make a few extra bucks during the pandemic; Mikey Guggenheim, a retail investor who looks a bit like Will Ferrell’s character in “Zoolander” and performs a rap number about the GameStop story, and Alvan Chow, an amateur speculator who couldn’t get a job on Wall Street but turned his $25,000 investment in GameStop into $8 million. (“How does that feel?” he asks, and the reply comes: “It’s OK, I guess. It’s a good starting point.”)
How did GameStop become such a phenomenon? It’s not as if its business model suddenly pivoted and the company started reaping huge profits. (The doc says that in 2020, GameStop was $216 million in debt and had an anemic online presence.) It was more of a confluence of events. A legendary and enormously popular retail investor known as “DeepF------Value” on Reddit and as “Roaring Kitty” on YouTube put out a video saying he was making a big bet on GameStop. Ryan Cohen, co-founder of Chewy.com, announced he was buying 9% of the company. The billionaire venture capitalist Chamath Palihapitiya sent out a Tweet asking what he should buy next, and hundreds of users of the subreddit known as wallstreetbets suggested GameStop. Elon Musk got in on the fun, tweeting, “Gamestonk!”
The “short squeeze” was real, and it was spectacular.
At times, the movement seemed to have little to do with GameStop, although many were starting to believe the company was undervalued. Other than a few viral videos in Episode One chronicling the demise of a couple of GameStop outlets, we never visit a GameStop store, or hear from its employees or board members. It was more about sticking it to The Man — in this case, the powerful short sellers who were banking on GameStop failing, and instead found themselves losing a collective $20 billion. GameStop stock kept soaring, in January of 2021 reaching an intraday stock price of $483, when it had been at $2.57 less than a year earlier. The party essentially ended when the Robinhood app halted the buying of GameStop, and the reasons behind that are … complicated.
But explained quite clearly in “Eat the Rich.”
