How much money this cost the mutual funds

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Question - Last year, some guy on the internet found that GameStop was undervalued. His reasoning was that the physical game market was still going strong, even if there it's trending downward in favor of digital. This lead more people on the internet, primarily on reddit, to look into GameStop as an investment. They found that a lot of mutual funds were shorting GameStop (GME) and that if/when it went up, they would lose a lot of money. So while the purchasing of GameStop might have started with the reasoning that it was undervalued, a lot of people joined because the more people purchased GME, the higher its value got, which would then cost the mutual funds more money. Both plans worked, at least in the short run as GME grew from just a few dollars a share up to $300+. We are unsure just how much money this cost the mutual funds, but it's definitely a lot.

Source - Reddit vs Wallstreet - GameStop, The Movie. (2021, February 4). YouTube.

Reference no: EM133164541

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