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%.