“isn’t worthless” is still to be decided IMO. Until you can sell it it defines worthless!

Firms like citadel will run crowding analytics, who owns what, at what leverage and rough margin trigger points. Over simplifying but they could be shorting the longs and going long on the shorts. Everyone generally knew situational was heavily levered.

To be clear, I'm not claiming Citadel created double digit drops in SK Hynix / Samsung. I am saying that as market vol hits, vol traders might choose to make it worse. And when word hits the street someone has a liquidity position, prop traders WILL come and pressure. SA's filings were clear how concentrated they were, and this was known. In this case, Citadel (hedge fund) bought, while I imagine Citadel Securities would have been doing this (speculated upon) trading. We'll know more when the filings come out though. I'll be curious what of the portfolio they kept and what they worked / rolled in the market

Citadel spread the rumor that the Fed was going to hike rates this week. This led to Situational Awareness getting margin called on their longs.

Sibling comment says "diversify", and I tend to agree. I've seen some shit, man. 2000 dot bomb, 2008, bumps along the way. 2000, I was in tech stocks like everyone else, lost a bunch. 2008, learned my lesson and was much more diversified. Lost some money, but not nearly as much as others. It was amazing watching, say, the S&P crater while our portfolio..just didn't. It just went down a fair chunk, and came back later (and probably didn't come back as much as it did for those that held on to their equities).

Diversification is a smoothing function. You won't get as much upside holding 25-30% bonds, but your portfolio won't suffer as much on the downside. If you're young and not ready for boring old-people investments like bonds, at least limit your tech stock exposure. Go buy boring utilities or something, maybe Berkshire Hathaway B shares.

One other advantage to diversification that I hear very little about is this: if you have to sell in a down market, you can sell your bonds and hold on to your equities in the hopes they'll bounce back. Regardless, you're not held to selling depreciated assets like equities, you can sell the bonds which are boring, but probably actually went up while everything else turns to shit.

That question is probably what inspired someone to create the first ever derivatives market

Stay market diversified and you will be fine in the long run. The AI bubble popping will be painful for all in the short term but a blip on the radar in the long term.

These hedge funds get wound up in complicated, leveraged, illiquid layered stacks of (often private) investment vehicles that go from highly profitable to financial nuke overnight. Thats how they just get wiped out while everyone else just has a bad day.

Ironically the whole point of “hedge” in hedge fund is for this to NOT happen but we’re seeing increasingly inexperienced players like here just building a financial nuke and then acting all surprised when it lights off.

Wall Street eats these types for breakfast and then moves onto another meal for lunch. Once more sophisticated players smelled blood in the water they just had a field day here. There are many more setups out there like this and there’s a whole army of folks just salivating for when they can blow up more AI over-leveraged financial nukes inexperienced and FOMOed investors have assembled.

> I would be very interested to know what he did with the management and performance fees

I mean, I'm pretty sure he pocketed the money and got richer. Most hedge fund compensation structure has always (ironically, I'd add, given the name "hedge" fund) incentivized volatility over long term performance.

> let's be clear here - he didn't actually "lose" a ton of money. he was up 439% net in the first half of 2026.

He's down 67% on the month. He most certainly lost alot of money.

He'll be fine and i think he'll be successful at raising more money, and he's still up on the year as far as I've been told by LP's, but he sure did lose alot of money this month.

Yes he lost a ton of money. He went from being up as much as you said to up only 80% and getting liquidated at that point. If it weren’t for Citadel stepping in to buy his investments who knows how much worse it could have gotten.

The only thing you can argue is realized vs unrealized.

But that's not what they want to see. They want to see that AI is a savior for all. The psychosis of what AI is, especially in these comment walls, is unfortunately and spectacularly real.

Anyone who's done any amount of investment can see this through the lens of history and I'm right there with you. This is the Lehman Brothers stage of the game and SA could be that "one". But Bro, we're still up 80%! - even WSB isn't filled with this level of ignorance.

I really don't like this guy, seriously he's a shark (he's probably right, but what a jerk): "If you know somebody has to liquidate, the best thing you have to do, unfortunately, sadly, Darwinian is to go sell all the positions you have in common, then start shorting everything they have. It accelerates the downfall as quickly as you can." of course then he says 'It's nothing I would ever do...'

Because hn is primarily about competence, knowledge and tech, which Martin has in spades.

The arguments against him barely hold water in general anyway.

Why do you think that just sharing a link to an earlier HN post means 'promoting' someone? I referenced the HN post because I found that it's less about Martin Shkreli himself and more about a quality conversation with good analysis about the inner workings of 'Hedge fund' world and market dynamics.

If you've a better source, share it; I'll have a look and might use that one in the future. Otherwise, if you can't contribute in a constructive manner, stop making baseless comments about others intention without understanding them first.

He has done more for wallstreet-to-mainstreet transparency than you believe.

His investor literacy youtube backlog is unusually deep and as of yet has only shilled his own trading product.

But your point is valid, he will never live down the fraud conviction and his face is so punchable.

You can still learn from thieves and crooks. Especially if they break down what they did and how they did it.

He's an absolute ghoul, and to see sibling comments praising him breaks my heart. Yeah, he "did his time", but he also took advantage of sick people for immense profit. You don't get a pass for that.

Like black hats getting cyber sec jobs, they probably know a thing or two.

If you’re gonna be a hater you at least gotta do it right! The pricing and the securities fraud were two separate things you can count against him.

He is one of the few folks in finance who regularly streams and is directionally interesting. He served his time.

I don't think those two cases are related

he's a relatively well known figure in finance and pharma investing

He has served his time for those crimes

Because he’s an expert.

Edit: I don't do podcasts but this is absolutely worth some of your time to watch.

seems like someone who is knowledgeable about financial shenanigans

Can you provide a comparable or superior analysis by someone else?

It’s an odd kind of bubble that slowly deflates over the course of a year.

It'd only really work retrospectively, but would be quite fun to see. Especially ones that investigate previous bubbles.

Good for one free crime of your choice

Anything he wants!

Believe it or not, you are legally bound to act in the interests of shareholders.

Though you cannot be pardoned from civil stuff, and the options to actually prosecute are pretty slim, so I doubt it.

Though, even if this is just tongue-in-cheek, you can literally buy a pardon in America right now with just a little bit a money into the pockets of the Trump family, in case you didn't get the joke (that the US government is literally pro-corruption right now).

I say this with absolutely no evidence and only stating it as a hypothetical. But as an example it would be plausible that insider trading was involved.