In the years leading up to
2022, Melvin Capital made bets against key stocks within the
USA stock market, after retail investors noticed inconsistencies with the stock, specifically the huge short position that Hedge Funds (including Melvin Capital) had accrued. Retail traders realized that these positions would at some stage need to be bought back so they independently decided to buy up the stock.
Melvin Capital essentially went bankrupt due to some very
poor decision making and lack of proper risk management.
The phrase "you did a melvin" was coined in
2022 to indicate that your lost
money, or made bad decisions which affected you negatively.