Citadel Buys Out Situational Awareness Positions

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sleepy5136

Well-known member
Long story short Situational Awareness (SA) a hedge fund got margin called and its positions were bought out by Citadel. Citadel manipulated the market by dropping news that a market rate hike was on the table on Tuesday despite the odds of it being low. Markets sold off day after and given SA was 4x leveraged, he was forced to sell his public positions and was bought by Citadel for 0.40-0.50 to the dollar. CRAZY stuff and quite frankly I’m surprised it’s even legal.

Article: https://www.wsj.com/finance/citadel...7159b?st=qR6S5m&reflink=article_copyURL_share
 
that guy has a very interesting story. He’s an Gerry McGuire storyline…After starting a hedge fund, when he left AI…he turned $2 billion into $40 billion, but hedge funds are exactly that, they use significant leverage to create that magic. Works great on the way up is painful on the way down.😳
How Leopold Aschenbrenner built a $45 billion AI hedge fund, and lost most of it

https://www.cnbc.com/2026/07/31/leopold-aschenbrenner-situational-awareness-fund-fire-sale.html?__source=iosappshare|com.apple.UIKit.activity.CopyToPasteboard
 
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TBH he will be fine. He still has his Anthropic position which is supposedly 5B. Heard he also collected his investment fees despite the situation
 
juliafjzvydrjkh said:
That’s a pretty wild situation if the timeline is as described. The leverage is what really stands out to me, because once a fund is 4x leveraged, even a relatively modest market move can put them in a position where they have no choice but to sell. Getting those positions at 40–50 cents on the dollar would obviously be a huge opportunity for the buyer. I’d be interested to see what the WSJ article says about the actual evidence behind the market manipulation part, though, because that’s a serious allegation.
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Ask Long Term Capital how that worked out for them….it an old story that will be repeated.🤦🏽‍♂️👎🏽😂😂😂
 
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