Melvin Capital raised put option on GameStop Class A shares to 6 million in fourth quarter 2020

Business

Hedge fund Melvin Capital Management on Tuesday disclosed it had raised the put option on Class A shares of U.S. video game chain GameStop Corp to 6 million shares for the quarter ended Dec. 31, from 5.4 million shares in the past quarter.

The disclosure – which comes after a flood of retail trading drove GameStop and other shares to extreme highs in late January and squeezed hedge funds like Melvin Capital that had bet against it – does not reflect January’s moves when Melvin said it liquidated its GameStop position.

Separately, the hedge fund reported a stake of 300,000 Class A shares in Airbnb as of Dec. 31, according to a regulatory filing.

While investors may be especially interested in Melvin’s position in GameStop, the firm also adds and sheds many other stock names every quarter, making the so-called 13F filings that detail quarterly holdings closely watched.

In the fourth quarter Melvin added a new position in Facebook by buying 4.6 million shares.

The fund, founded by Gabriel Plotkin, also increased its investment in financial company Mastercard Inc by 168% during the quarter.

It raised its stake in Visa by 59%. The hedge fund also put on a new call option on Mastercard and increased the call option on Visa by 110%.

Stocks that may get a boost once life returns to some semblance of normal as a COVID-19 vaccine is rolled out also got a boost in the portfolio.

For example, the fund’s stake in hotelier Hilton Worldwide Holdings was raised by 125% during the quarter. Similarly the firm bought more shares in Nike, raising its holdings by 21%.