[scrlk]

> Aschenbrenner party blamed short sellers who targeted the firm’s positions for exacerbating the fund’s losses, the letter said. The letter compared Situational’s experience to a bank run.

4 years ago, it was SBF blaming Changpeng Zhao for shorting FTT and triggering a run on FTX.

Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.

[mamonster]

>Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.

I would be very interested to know what he did with the management and performance fees (and how much they were) he gathered over the last 3 years. Just the perf fees from 2025 are probably enough to set him up for life. If he reinvested not so great.

[hn_throwaway_99]

> 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.

[stephbook]

Even Wirecard – a fraudulent German bank missing some billions of euros and run by a Russian spy – always blamed bad press.

Denials mean nothing.

[cmiles8]

He had to liquidate everything that’s liquid and is left, seemingly, with some iffy-looking things that have paper returns but are broadly illiquid. Thats a disaster for a fund no matter how you slice it.

[2PqboPPmKegvanx]

>Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast

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.

his issue was getting margin called due to being short on software (which went up) and long on AI infra (which went down) - getting margin called != losing money.

[chollida1]

> 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.

[chaos_emergent]

Aren’t month over month gains and losses aren’t particularly surprising nor noteworthy when you’re operating a leveraged fund? Shouldn’t one expect higher volatility, but also higher returns?

[chollida1]

yes, monthly returns are expected to be volatile for a fund like this.

No in that, no LP wants 2/3rd down months. That kind of swing is insane.

That' means any LP that invested in the past 3 moths is completely wiped out, as in their full investment into the fund is at zero.

Now most LP's are probably investors for 6 months or more so they'll be ok.

What I'd be worried about is that if its true that he liquidated his entire public portfolio and only holds privates, where are the returns going to come from when anthropic is currently valued at what it is likely to go public at, and where is investor liquidity going to come from when they want to redeem.

He looks like he's turning his fund into a venture capital fund, which might be for the best given that he seems good at that and poor at running a hedge fund that invest in public securities.

[mancerayder]

Wait, he was heavy in AI while shorting software?

What happened to the word hedge in hedge fund?

[uncivilized]

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.

[bigstrat2003]

Unrealized losses do not count as losing money (and similar for gains, of course).

[BoorishBears]

They do once you're getting margin called.

[uncivilized]

Tell that to Leopold

[RIMR]

Sounds like someone took huge risks, incurred huge losses, and thought they were entitled to always win. It honestly feels good seeing these folks get knocked down a peg.