I believe they also shorted AMC among others.

This should be a lesson learned that trying to short a stock heavily already in the dumps is just a dumb idea. The potentially reward is minor (In Melvin Capital's case about $54 million was the max if Gamestop went bankrupt), and the risk was severe even in "normal" evaluations (if they got in at $8, every uptick of $8 would cost them 54 million). The payout was just so damn minor on this one that I can't understand why they would take such massive risks. Even if we didn't get current valuations, the price of GME just couldn't reasonably go much lower than it already was outside of bankruptcy, but it absolutely could easily go higher.

It was a stupid move, and I wouldn't invest a dime with anyone who makes such plays.