In early 2021, millions of ordinary people across the United States began buying shares of the declining video game store GameStop in increments of tens, hundreds or thousands of dollars. Their investments were mocked by financial experts, who cited the store’s poor underlying metrics. But the masses’ collective action proved shockingly powerful: they pushed GameStop’s price from under $3 to as high as $483 in late January 2021, causing the hedge funds that had bet against it to lose billions of dollars.

Nearly three years later, the new movie Dumb Money attempts to dramatize and make sense of the strange episode. Paul Dano stars as Keith Gill, a trader and livestreamer whose full-throated support of the stock on the subreddit community Wall Street Bets catalyzed a movement around “meme stocks”: assets that surged in price fueled by social media enthusiasm. Seth Rogen, Pete Davidson and America Ferrera all play various characters swept up in the mania that captivated market watchers old and new in the throes of the pandemic. 

Dumb Money portrays the GameStop craze as a sea change moment in American finance, in which everyday people, known as retail investors, successfully grabbed back power from Wall Street and claimed agency in American financial systems. “We were drawn to the story of Keith Gill and some of the people who followed him precisely because it’s such an outlier,” writers Lauren Schucker Blum and Rebecca Angelo told TIME in a statement. “Retail traders usually underperform the market and the big hedge funds. By focusing on this exceptional moment, we saw a chance to show how the system normally works and why that system needs to be examined.”

The craze altered many important dynamics of investing and financial literacy, and its legacy is still being determined, experts tell TIME. “The whole GameStop thing: they lost,” says Kyla Scanlon, an economics analyst and content creator of the retail investors. “It’s very hard to beat the stock market.”

In conjunction with the release of the movie, TIME explored the impact of the GameStop and meme stock hype on various aspects of the finance world. For those who aren’t familiar with how the saga played out, this article includes minor spoilers for Dumb Money. 

The rise of the everyday trader

The first undeniable impact of GameStop: It sparked the imagination of many people across the country who had never cared about or understood the stock market. Most of stock trading is still done by professional traders, many of them on Wall Street. Seeing the rise of GameStop’s stock gave novices an impetus to open brokerage accounts on platforms like Robinhood and TD Ameritrade, allowing them to easily participate in a vast financial system that had previously seemed inaccessible. 

These new-found traders also gathered online on Reddit’s r/WallStreetBets sub-forum and Stocktwits, a finance-centric social media company which has since added the ability for its users to buy and sell stocks. When the GameStock craze exploded, Stocktwits had to expand its infrastructure by 10 times just to keep its servers up and running, says CEO Rishi Khanna. 

Khanna says that activity on Stocktwits has since receded by half. Activity on r/WallStreetBets is now a fraction of what it was during the more manic period. By December 2022, one market commentator described meme stocks as “way past,” comparing them to fads of yore like Soulja Boy and the Macarena. 

But Khanna says that Stocktwits has nonetheless grown by four times what it was in 2020, and has hundreds of thousands of daily active users who continue to use the site to share information and predictions. And one JPMorgan strategist estimated in February that retail traders still account for 23% of market orders, which he said was nearing an all-time high. 

“I do think there’s been a permanence of a mentality change,” Khanna says. “Those that have stayed in the market have kept learning.” 

Flailing companies rally

In the past, the act of hedge funds shorting a stock—i.e., betting on it to fail—could signal a death knell for a struggling company. But during the meme stock craze, retail traders were able to stop—or at least delay—the demise of several companies that might have otherwise been chewed up by hedge funds. GameStop was able to stave off bankruptcy thanks to r/WallStreetBets’ support—and this March, the company turned its first quarterly profit since 2021. 

The movie theater company AMC was also staring down the barrel of bankruptcy in January 2021, when a flurry of ardent fans dumped money into its stock, injecting the company with much-needed capital at a time when most movie theaters were closed due to the pandemic. As a result of the stock’s meme-ification, the company was able to shore up its balance sheet, reduce its debt, and expand its content and concession offerings. AMC’s stock has since been on a wild ride and has recently nosedived after the company executed a risky stock split. But it’s possible the company would not have made it to this point without retail investors. 

The rebound of those two once-prominent entertainment companies overturned a long-held notion that individual investors had no impact on the stock market in the face of institutional funds. The craze showed that a bunch of Davids working together could save a cherished piece of culture while also seriously harming a Goliath (in this case, Melvin Capital, which bet big on GameStop’s decline, lost billions and shut down in 2022). The craze also reinforced the idea that while stocks may derive some of their worth from performance data, they don’t actually have a “true” or underlying value and are heavily influenced by market sentiment. 

“Stocks are totally disconnected from fundamentals in every sense,” Scanlon says. “The funny thing about the economy and the stock market is that if you believe something, it kind of happens. So that became much more apparent.” 

But retail traders aren’t necessarily winning

Just because more traders have been introduced to financial concepts or helping save companies doesn’t mean they’re getting rich. Dumb Money highlights the big winners and losers of the GameStop craze, including those who bought in at the top lost thousands of dollars.

“People were ill-informed on what to do,” Scanlon says. “They would post in the forum and then lose a bunch of money. And once you lose a bunch of money a bunch of times, you have no more money to lose.” 

“The axiom is that trading is generally a losing process,” Khanna says. “Don’t over-trade; don’t jump in and out because of what you’re seeing on the news. The mistake of 2021 was [people] just thinking, ‘Everything always keeps going up and never will come down.’”

The spread of financial misinformation was exacerbated by the rise of social media financial influencers, who were able to find newly curious audiences on platforms like TikTok. A Forbes Advisor study from this year found that 80% of millennials and those in Gen Z have gotten financial advice from social media. Some of that advice is well-reasoned and well-intentioned. 

But while Scanlon herself tries to counteract the deluge with her own well-researched videos, she says bad information from biased actors continues to propagate. “Everybody was always so worried about the mainstream media pushing a narrative,” she says. “But now you have like these singular people that can push crazy conspiracy theories, like, ‘I can make you so much money, just subscribe to my newsletter.’” 

Hedge funds reassessing

Nevertheless, this influx of retail traders has forced hedge funds to change their tactics and manage their risk more carefully. After seeing Melvin Capital lose billions from shorting GameStop, many hedge funds now monitor financial discussions on Reddit and other social media platforms to see what’s bubbling. Some hedge funds have become more wary about shorting volatile stocks, in case they face a counter-movement from invigorated retail investors. Andrew Left, a once prominent short seller, took an eight-figure loss amid the meme stock craze and said in January 2021 that his firm Citron Research would stop publishing its research on short positions. 

Hedge funds’ ability to place risky bets has also been dented by larger macroeconomic conditions. In 2020 at the beginning of the pandemic, the Federal Reserve cut interest rates to zero, which allowed investors to borrow more money and generally take bigger financial risks. This, in turn, helped to juice an economy rendered sluggish by COVID restrictions. But these easy-money policies resulted in massive inflation, so the Fed started raising rates again, causing many players to curtail their risky behaviors, like aggressive short-selling. 

Still, many hedge fund managers are doing just fine—including Melvin Capital’s Gabe Plotkin, one of Dumb Money’s central villains. While Plotkin took heavy losses during the meme stock craze, he still scrounged up enough money to lead a group that bought the NBA basketball team Charlotte Hornets recently at a $3 billion valuation. 

Regulation hasn’t materialized

Dumb Money culminates in a depiction of the real-life Congressional hearing in which Keith Gill, Robinhood’s Vlad Tenev, and other central players were grilled by the likes of Rep. Alexandria Ocasio-Cortez. Several Congressmen railed against hedge funds, with California Representative Maxine Waters saying, “private funds engaged in predatory short selling to the detriment of other investors must be stopped.”

The GameStop craze brought regulatory scrutiny to the world of short-selling and prompted calls to protect retail investors by restricting risky types of trades and reducing the gamification of trading apps. But there has been very little concrete change in Washington thus far. Several bills were drafted in Congress—including Maxine Waters’ Short Sale Transparency and Market Fairness Act—but did not advance. 
Last December, the Securities and Exchange Commission (SEC) proposed reforms to securities markets after its Chair Gary Gensler pledged to “drive greater efficiencies…particularly for retail investors” in the wake of the meme stock craze. The proposals sparked fierce debate, and actual reforms have yet to come into effect.