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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 +2.95% 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
$ 86.80
+4.86 +5.93%
Volume: 2.36M
June 24, 2022 4:04p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$19.80 billion
Rev. per Employee
$614,554
loading...
/zigman2/quotes/202780307/composite
US : U.S.: NYSE
$ 116.71
+6.19 +5.60%
Volume: 2.59M
June 24, 2022 4:03p
P/E Ratio
45.00
Dividend Yield
0.51%
Market Cap
$32.48 billion
Rev. per Employee
$40,986
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 116.46
+4.02 +3.58%
Volume: 69.87M
June 24, 2022 4:00p
P/E Ratio
56.17
Dividend Yield
N/A
Market Cap
$1184.91 billion
Rev. per Employee
$292,178
loading...
/zigman2/quotes/214127379/composite
US : U.S.: Nasdaq
$ 107.48
+6.88 +6.84%
Volume: 6.60M
June 24, 2022 4:00p
P/E Ratio
134,350
Dividend Yield
N/A
Market Cap
$33.86 billion
Rev. per Employee
$321,495
loading...
/zigman2/quotes/215406166/composite
US : U.S.: NYSE
$ 130.48
+5.92 +4.75%
Volume: 3.91M
June 24, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$13.60 billion
Rev. per Employee
$172,157
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 267.70
+8.84 +3.41%
Volume: 33.92M
June 24, 2022 4:00p
P/E Ratio
27.93
Dividend Yield
0.93%
Market Cap
$2002.14 billion
Rev. per Employee
$928,663
loading...
/zigman2/quotes/202291990/composite
US : U.S.: Nasdaq
$ 102.34
+8.32 +8.85%
Volume: 4.26M
June 24, 2022 4:00p
P/E Ratio
88.11
Dividend Yield
0.00%
Market Cap
$16.08 billion
Rev. per Employee
$580,946
loading...
/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 205.51
+8.87 +4.51%
Volume: 7.75M
June 24, 2022 4:00p
P/E Ratio
33.04
Dividend Yield
0.73%
Market Cap
$428.11 billion
Rev. per Employee
$1.12M
loading...
/zigman2/quotes/208128355/composite
US : U.S.: NYSE
$ 191.94
+6.33 +3.41%
Volume: 367,387
June 24, 2022 4:00p
P/E Ratio
35.30
Dividend Yield
0.77%
Market Cap
$46.73 billion
Rev. per Employee
$1.10M
loading...
/zigman2/quotes/200170042/composite
US : U.S.: Nasdaq
$ 139.39
+6.33 +4.76%
Volume: 3.08M
June 24, 2022 4:00p
P/E Ratio
30.89
Dividend Yield
0.86%
Market Cap
$45.62 billion
Rev. per Employee
$115,475
loading...
/zigman2/quotes/211348248/composite
US : U.S.: NYSE
$ 23.03
+0.66 +2.95%
Volume: 38.14M
June 24, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$45.22 billion
Rev. per Employee
$595,734
loading...

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