Melvin Capital, now a defunct hedge fund, was heavily reliant on shorting strategies. They worked on finding overvalued stocks and bet that they would fall. That approach is generally risky, especially in periods of market high volatility. One of the proponents of their failure was the infamous GameStop short squeeze in 2021. To better understand all the reasons for their demise, we need to conduct Melvin Capital Portfolio Analysis.
After the GameStop failure, Melvin Capital managed to diversify its portfolio into several sectors. If handled properly they could try to pull out of the bad spot they fell into, but subsequent shorting misses didn’t help and there was no other way but to close the fund.
In their last 13F filing Melvin...
