If it were only $55M in puts, they would not have needed the bailout. What people in the know think is that they sold calls to finance the puts to achieve a net-zero position... which would be an unlimited-risk synthetic short position.

How do we know it was a bailout? Maybe they just raised extra money to take advantage of a volatile market.

Of course, we don't know for sure. But it's strange to sell off future revenue shares for capital today when you can simply double-down using leverage.. unless they ran into their margin limit.

Word on the street has that Melvin is down 80% YTD, some other L/S funds 20-30%.

They took a $2.7B loan from Citadel early last week (Tuesday). They appeared exposed.

Were they actually long PUTs? There big problem was their short stock position. The latter gets crazy quickly, as we've seen.