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May 19, 2022, 8:17 a.m. EDT

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

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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.

Ticker Name YTD performance
/zigman2/quotes/203077299/composite LYV Live Nation Entertainment -29%
/zigman2/quotes/202780307/composite HLT Hilton Worldwide -18%
/zigman2/quotes/210331248/composite AMZN Amazon.com -36%
/zigman2/quotes/214127379/composite DDOG Datadog -51%
/zigman2/quotes/215406166/composite BILL Bill.com -59%
/zigman2/quotes/207732364/composite MSFT Microsoft -24%
/zigman2/quotes/202291990/composite EXPE Expedia -34%
/zigman2/quotes/203660239/composite V Visa -8%
/zigman2/quotes/208128355/composite RACE Ferrari -29%
/zigman2/quotes/200170042/composite MAR Marriott International -7%

“If you were wondering why Amazon, Expedia and Uber /zigman2/quotes/211348248/composite UBER +4.30% 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.

/zigman2/quotes/203077299/composite
US : U.S.: NYSE
$ 83.06
+0.48 +0.58%
Volume: 1.04M
July 1, 2022 4:05p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$18.94 billion
Rev. per Employee
$762,808
loading...
/zigman2/quotes/202780307/composite
US : U.S.: NYSE
$ 112.99
+1.55 +1.39%
Volume: 1.83M
July 1, 2022 4:03p
P/E Ratio
43.57
Dividend Yield
0.53%
Market Cap
$31.45 billion
Rev. per Employee
$46,894
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 109.56
+3.35 +3.15%
Volume: 73.02M
July 1, 2022 4:00p
P/E Ratio
52.84
Dividend Yield
N/A
Market Cap
$1114.71 billion
Rev. per Employee
$297,107
loading...
/zigman2/quotes/214127379/composite
US : U.S.: Nasdaq
$ 101.05
+5.81 +6.10%
Volume: 3.82M
July 1, 2022 4:00p
P/E Ratio
126,313
Dividend Yield
N/A
Market Cap
$31.83 billion
Rev. per Employee
$372,895
loading...
/zigman2/quotes/215406166/composite
US : U.S.: NYSE
$ 113.69
+3.75 +3.41%
Volume: 1.63M
July 1, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$11.85 billion
Rev. per Employee
$374,324
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 259.58
+2.75 +1.07%
Volume: 22.84M
July 1, 2022 4:00p
P/E Ratio
27.08
Dividend Yield
0.96%
Market Cap
$1941.41 billion
Rev. per Employee
$928,663
loading...
/zigman2/quotes/202291990/composite
US : U.S.: Nasdaq
$ 96.40
+1.57 +1.66%
Volume: 2.66M
July 1, 2022 4:00p
P/E Ratio
83.00
Dividend Yield
0.00%
Market Cap
$15.14 billion
Rev. per Employee
$648,716
loading...
/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 199.18
+2.29 +1.16%
Volume: 4.13M
July 1, 2022 4:00p
P/E Ratio
32.03
Dividend Yield
0.75%
Market Cap
$414.92 billion
Rev. per Employee
$1.25M
loading...
/zigman2/quotes/208128355/composite
US : U.S.: NYSE
$ 187.94
+4.46 +2.43%
Volume: 338,259
July 1, 2022 4:00p
P/E Ratio
34.57
Dividend Yield
0.79%
Market Cap
$45.53 billion
Rev. per Employee
$1.12M
loading...
/zigman2/quotes/200170042/composite
US : U.S.: Nasdaq
$ 139.18
+3.17 +2.33%
Volume: 2.04M
July 1, 2022 4:00p
P/E Ratio
30.85
Dividend Yield
0.86%
Market Cap
$45.55 billion
Rev. per Employee
$131,167
loading...
/zigman2/quotes/211348248/composite
US : U.S.: NYSE
$ 21.34
+0.88 +4.30%
Volume: 20.69M
July 1, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$41.90 billion
Rev. per Employee
$730,580
loading...

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