Submitted by QTR's Fringe Finance
Leopold Aschenbrenner’s hedge fund, stuffed like the ass of a Thanksgiving turkey with every trendy AI name you could throw a dart at, reportedly suffered one of the most spectacular drawdowns of recent memory, losing roughly 67% in July after a series of heavily leveraged bets went violently against it.
According to the Wall Street Journal, the losses became severe enough to trigger margin calls, forcing the firm into emergency asset sales. Public positions were reportedly sold to Citadel to raise liquidity, and the fund even negotiated a multibillion-dollar sale of its prized Anthropic stake before apparently changing its mind the following morning.
It is, in every sense of the word, the kind of month that reminds people leverage is not just a way to make returns bigger…it’s a way to make your mistakes arrive all at once.
What’s remarkable isn’t that the fund blew up just weeks after everyone in the media started slobbering over Aschenbrenner as if he was some visionary for figuring out the “strategy” of buying crap featured daily on CNBC using leverage. Markets have been humbling overconfident investors since the Dutch were trading tulips. What’s remarkable is that, according to reports describing the investor letter, Aschenbrenner partially blamed short sellers for accelerating the collapse, likening the experience to a bank run:
Aschenbrenner partially blamed short sellers who targeted the firm’s p
