Melvin Capital’s liquidation may have been the mystery catalyst behind Wednesday’s plunge in stocks

By Steve Goldstein

It wasn’t just Target’s off-target results that blasted U.S. stocks on Wednesday, when the stock market as tracked by the S&P 500 had its worst day in nearly two years .

The liquidation of Melvin Capital also played a major role, says Tom Hayes, chairman and managing member of Great Hill Capital.

The $7.8 billion fund is shutting down, the firm announced late Wednesday. “The thing about a liquidation is that you don’t send the letter until AFTER you’ve done the selling or the vultures will come in and pick you off like a super slow ‘warrior’ at a paintball park,” said Hayes.

Melvin Capital’s 13-F filing shows the top holdings at the end of the first quarter.

“If you were wondering why Amazon, Expedia and Uber /zigman2/quotes/211348248/composite UBER -0.42% were selling off like they were going out of business – when the exact opposite is true (they are leaders in their fields), now you know,” says Hayes.

The so-called Tiger cubs, including Tiger Global, have also been under pressure this year, with Tiger Global losing an estimated $17 billion . Hayes adds the Tiger cubs moved at once in April and early May to sell their technology holdings.

“The acute pain is now likely in the rear view mirror now that the source of the clog has been revealed. We may get a few aftershocks, but the cat is out of the bag at this point,” Hayes adds.

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Add to watchlist LYV

Live Nation Entertainment Inc.

US : U.S.: NYSE

$ 67.09

+1.14 +1.73%

Volume: 1.36M

March 27, 2023 4:03p

P/E Ratio

117.17

Dividend Yield

N/A

Market Cap

$15.27 billion

Rev. per Employee

$1.30M

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Hilton Worldwide Holdings Inc.

US : U.S.: NYSE

$ 132.30

+0.47 +0.36%

Volume: 1.94M

March 27, 2023 4:03p

P/E Ratio

29.18

Dividend Yield

0.45%

Market Cap

$35.13 billion

Rev. per Employee

$55,415

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Amazon.com Inc.

US : U.S.: Nasdaq

$ 98.04

-0.09 -0.09%

Volume: 46.72M

March 27, 2023 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$1005.56 billion

Rev. per Employee

$333,539

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Datadog Inc. Cl A

US : U.S.: Nasdaq

$ 65.60

+0.36 +0.55%

Volume: 3.83M

March 27, 2023 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$20.86 billion

Rev. per Employee

$348,979

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BILL Holdings Inc.

US : U.S.: NYSE

$ 70.95

+1.71 +2.47%

Volume: 1.24M

March 27, 2023 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$7.37 billion

Rev. per Employee

$377,727

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Microsoft Corp.

US : U.S.: Nasdaq

$ 276.38

-4.19 -1.49%

Volume: 26.84M

March 27, 2023 4:00p

P/E Ratio

30.73

Dividend Yield

0.98%

Market Cap

$2088.51 billion

Rev. per Employee

$923,502

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Expedia Group Inc.

US : U.S.: Nasdaq

$ 90.73

+0.19 +0.21%

Volume: 2.61M

March 27, 2023 4:00p

P/E Ratio

42.56

Dividend Yield

0.00%

Market Cap

$13.88 billion

Rev. per Employee

$707,091

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Visa Inc. Cl A

US : U.S.: NYSE

$ 221.81

+0.77 +0.35%

Volume: 7.21M

March 27, 2023 4:00p

P/E Ratio

31.65

Dividend Yield

0.81%

Market Cap

$455.22 billion

Rev. per Employee

$1.14M

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Add to watchlist RACE

Ferrari N.V.

US : U.S.: NYSE

$ 266.17

+0.80 +0.30%

Volume: 237,063

March 27, 2023 4:00p

P/E Ratio

49.55

Dividend Yield

0.56%

Market Cap

$64.74 billion

Rev. per Employee

$1.09M

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Marriott International Inc.

US : U.S.: Nasdaq

$ 156.58

+0.02 +0.01%

Volume: 1.64M

March 27, 2023 4:00p

P/E Ratio

21.59

Dividend Yield

1.02%

Market Cap

$48.24 billion

Rev. per Employee

$55,101

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Uber Technologies Inc.

US : U.S.: NYSE

$ 30.62

-0.13 -0.42%

Volume: 17.92M

March 27, 2023 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$61.80 billion

Rev. per Employee

$971,860