THE CITADEL GAME THAT CAUSED LEOPOLD ASCHENBRENNER’S FORCED SALE
> Citadel sees a young man in his early twenties managing a fund worth over $45 billion, nearly twice the size of Bill Ackman’s fund, which has been in operation for 23 years.
> The fund, in just 2 years, has grown from a modest $225 million to over $40 billion, with just 8 employees and no background in asset management. The fastest growing fund in history.
> Citadel sees a weakness in the portfolio ⟶ leverage.
> Citadel knows the thesis is right: AI infrastructure is where the real money is in AI. No matter who wins in the model race, the infrastructure wins.
> Now, this young man is holding billions in these assets.
> Then July 10 came after the $SKHY trade, followed by a major selloff across all AI stocks, with most down more than 30% in 2 weeks between July 10–20.
> Leopold Aschenbrenner’s short positions starts moving up against his direction, causing more losses (he was short on software stocks), with positions worth billions of dollars.
> July 24th, Leopold Aschenbrenner sends a letter to investors calling the selloff a buying opportunity and asks for more money, with that window to be open on August 1st, the same day of his wedding. With good news that the fund is up 439% through June YTD.
Perfect opportunity:
> July 27, Citadel Securities raised a false alarm, saying the Fed is gonna do a surprise rate hike.
> July 28, retail, out of fear, the market sells off after Citadel’s report & Leopold Aschenbrenner tries to raise & borrow more money to avoid a margin call for bleeding options positions. Both long and short positions bleeding.
> July 29, banks’ margin calls began. News people spread fear, the selling continues. Perfect opportunity.
> July 30, Jane Street and other market makers bid, but Citadel’s price is better. Citadel buys the majority of his portfolio for a massive discount.
> 3rd August, Citadel Securities is up more than $3 billion in just 2 days after buying Leopold Aschenbrenner’s Situational Awareness public book.
> Same Monday, 3rd August, Citadel Securities says, “the bull market drivers are intact.”
No AI bubble news, no market top, but buying the majority of the Leopold Aschenbrenner portfolio is the AI bottom and the start of the bull market.
Sad for those who didn’t buy the bottom. Because Citadel, as a market maker, won’t sell those positions anytime soon.
The game is rigged against retail and anyone that offers retail help.
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