| ▲ | vessenes 6 hours ago |
| This is everywhere. For reference, former FTXer and OpenAIer raised $225m into a hedge fund structure, went long and short, and reportedly peaked at $40bn of value; leverage bit hard this week and they sold their entire-ish portfolio to Citadel at $10bn. (Which, I imagine was very likely aiming at this outcome in their trading in the last few weeks). Not reported anywhere -- was additional money raised in to the fund, and what is the LP basis? The story might be: wunderkind 40x+ed his first hedge fund and sold it to Citadel, or it might be: wunderkind raised $20bn and turned it into $10bn fast trading against Citadel. Inquiring minds want to know! |
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| ▲ | Diogenesian 4 hours ago | parent | next [-] |
| I strongly suspect it's closer to the latter; CNBC says they had to sell rapidly to meet margin requirements and it couldn't be confirmed if they actually succeeded. Suggests there was a lot more than $250m in collateral on the line. https://www.cnbc.com/2026/07/30/leopold-aschenbrenners-hedge... |
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| ▲ | reisse an hour ago | parent [-] | | Nah, if they reinvested realized profit they can still be in the green overall |
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| ▲ | animal_spirits 2 hours ago | parent | prev | next [-] |
| If you owe someone 10 thousand dollars that’s a big problem for you. If you owe someone 10 billion dollars that’s a big problem for them |
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| ▲ | tyre 4 hours ago | parent | prev | next [-] |
| You’re talking about the same fund. They were open about their gains. It was the margin calls and illiquidity that got them, not going negative. Some of their assets, like Anthropic stock, isn’t worthless, it’s just illiquid. |
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| ▲ | andy_ppp 3 hours ago | parent [-] | | “isn’t worthless” is still to be decided IMO. Until you can sell it it defines worthless! | | |
| ▲ | victorbjorklund an hour ago | parent [-] | | You can sell it on secondary market? I’m sure many investors are bound up but there are transactions there. |
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| ▲ | changoplatanero 5 hours ago | parent | prev | next [-] |
| Say more about how citadel made this happen with their trading? |
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| ▲ | infecto 5 hours ago | parent | next [-] | | 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. | |
| ▲ | vessenes 5 hours ago | parent | prev | next [-] | | 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 | | |
| ▲ | Ekaros 3 hours ago | parent [-] | | It really sounds like market manipulation... But oh well it is the biggest boys doing it so it can't be that illegal... Free markets and everything for them right? | | |
| ▲ | victorbjorklund an hour ago | parent | next [-] | | Short squeezing is legal. No need to protect short sellers from the market. | |
| ▲ | bad_haircut72 2 hours ago | parent | prev | next [-] | | Im not a trader but my understanding was that some traders at Citadel heard a rumor these guys were exposed, which gave Citadel an advantage because they knew they would have to liquidate? That doesnt sound like market manipulation to me, just trading with all the information you have | |
| ▲ | quickthrowman an hour ago | parent | prev [-] | | Situational Awareness filed a 13F that lists a hedge fund’s long and short positions with the SEC. It’s public information, forcing an overleveraged fund to liquidate by pressuring the instruments they’re exposed to is not market manipulation, leverage cuts both ways and all of the people/institutions involved are professional/sophisticated investors Here are all the SEC filings from Situational Awareness courtesy of SEC’s EDGAR: https://www.sec.gov/edgar/browse/?CIK=0002045724 |
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| ▲ | jvsg_ 5 hours ago | parent | prev [-] | | 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. | | |
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| ▲ | moralestapia 5 hours ago | parent | prev [-] |
| Wow, so, he narrowly avoided prison while at FTX, then went to work for Scam Altman, now does "investment funds" (a classic trope). The guy really really really wants to end up in prison, lol. |
