NEWSMAX

We're making the assumption that it is one of the top podcasts that your customers are listening to and you're saying something that is going to be worthwhile to them. That is an amazing use of time because you use one hour, or maybe on TVPN, you use like 20 minutes if you're a busy CEO and then you get clips and clips and clips out of it. And you just were able to amplify the equivalent of having a thousand meetings into this setting where someone is able to pull better responses from you than you might have been able to give on the spot. That's true. But what a lot of CEOs also do, and founders in general, is just try to maximize her volume at any cost. And that leads to going on a podcast that nobody listens to, going on a show that is actively detrimental to your vibes. There are shows where it's net negative. It's not just a waste of time, but you literally leave with a worse reputation than if you hadn't gone on there, or just being boring, wasting people's time, or you're making people angry and you're building a brand that you actually don't want. And now you have to put in extra effort to unwind the brand and walk it back, versus if you had just been more focused in the first place. So I think that optimizing for volume and sheer quantity leads you down the road to all of these perils. Whereas if you're just focused from the beginning and say, here are the things that matter to me, here are the podcasts and shows and venues that I actually respect and people listen to, we got to focus on those. That's a better use of your time than just to go like Hungry Hungry Hippos with it. Yeah. It's also sometimes cool when the.

Robinhood Social is something I'm really excited about. It's growing, we're rolling it out. It's not out to everyone yet. And the reason for that is we've just been iterating on all of the details. Building a social network from scratch is pretty complicated, right? You want to. There's a decision about what type of content you want to allow people to post. And at first we started with only trades and we came to the conclusion maybe that was a little restrictive. You want to give people a little bit more freedom to post charts and things like that, to post comments, maybe news stories, but you don't want to give too much freedom. So we've been iterating heavily. We just added politician trades as well, which, which have been doing quite well. And yeah, now you're starting to get to the point where you have legitimate influencers on Robinhood Social with, you know, thousands of followers and we're still rolled out to a relatively small portion of the customer base. So I think we've, we've got good signal that it'll do well and it'll be useful. And yeah, yesterday it sort of like transitioned to people posting Robinhood Social content on X which, which is very interesting. I think the unique differentiator that we have that that makes it compelling to people is that there's actual trades and real portfolios tied to the account. So we can combine these two things, you know, real transactions with opinions and that gives you a primitive that you can't find easily in other social the same content, you know, you see somebody post on X, like just closed out this position, like, you know, can my upd my thesis or whatever doesn't have the same weight if they are doing that and they either printed on it or, you know, took a meaningful loss. So it's great content. I have one last question. You've been.

I think it's a really bad idea to just optimize for going viral. Okay, well, viral comes and goes. What's that? Yeah, yeah. Why? Why? It feels like it's such a badge of viral comes and goes. Like it's. You're viral for like 24 hours, 36 hours, good or bad. You know, I think for Leopold maybe we could get to that, like by next week people could be saying he's the goat again. People are just very fickle and everyone is just more leverage all the time. No, I do think people under people have this idea of if I can just go viral once, then I'll have a big business. And I think back with just building our show, like we had so many. We had some big, you know, moments, you know, you can think of like the Soham Parikhs and there were big guests and there were things like that. But the amount of times that we needed to go like moderately viral on X to build our audience was like 20 times more than I would have thought. Yeah, that you needed to. To build a media business. And so, yeah, just trying to go doing something that will get you viral once and sort of in a shortcut, kind of like almost cheating, which rage bait is like, wouldn't call it cheating but, but it's like, you know, it's kind of, it's, it's kind of close to there. It's just short term and it doesn't actually get you the thing that you want, which is like derp. Sustained attention. Yeah, I agree with you. But it's also not just about viral versus not viral. It's actually about consistency. So if you are consistent over the course of a year, there will be times when you go more viral, less viral. There will be times when there's like some Tuesday afternoon thing that you do that catches the attention of 50 people, but it happens to be that one of the exact right people is among them. You just have to keep doing the same thing kind of forever. It's like getting fit. You don't get fit by eating nothing for two days and then lifting for two days straight. It's like you just have to go to the gym kind of every day for the rest of your life in order to be fit. And the same thing is true of relevance. Consistency in just keep doing it. It's not a one time thing. But also consistent consistency in like, what are you going viral for? It's like Ilya said, what are we scaling? What are you going viral for? Because if it's not going viral for the thing that you actually consider your true identity to be now you've actually just gone in the wrong direction. Now you have to, like, overcorrect back. And so if you are consistent with the story and then with doing it over and over, that's a lot better than trying to put everything into one moment. Well said. Do you think we are at peak?

Last post. I want to go through Jordy. Have you seen Spider Man? No Way Home. Absolutely no. Not. Absolutely not. Should I? I think I have. I'm pretty into movies now, but we saw the Odyssey, and I appreciate film. You're a film buff now? Your film. Stop. Yeah, honestly, no. There was a question on the timeline from Rob Felt. Rewatching. He was rewatching Spider Man. No way home to prep for Brand New Day, the new Spider man movie. And that is actually insane. What? Right as you said that, a white spider landed from the ceiling on my microphone. You see this? Yeah. Yeah, I do. Wow. You said Spider Man. Maybe you are the next Spider Man Just landed. I'll try to show everyone. Yeah, you might need to turn down the console. Put down your laptop. Swing it out more. Oh, it's really going around. Oh, it's on the ground now. Whoa. There we go. Can you see this at all? I don't know if people can see this, but there is a spider crawling on Jordy's microphone. You'll have to really. Oh, there. Yeah, you can see it in the. In the monitor right there. That's a very good omen. I think that's a good omen. Anyway, spiders can hear. Yeah. They can speak English. Well, let's feel free to deal with that. I'm going to talk about this. So in Spider man, no Way Home, the movie, the prequel to Brand New Day, I think Homecoming is in this series, right? There's a whole series of new. The latest round of Spider man with Tom Holland. Right. Is that it? Daily Bugle Web show scene pops up. And all I can think about now is a question. Is the TVPN aesthetic inspired by J. Jonah Jameson's web show? And if you look at it, it does sort of look like our show. And so it's a good question. Did we see this film? Did Jordi, who is the brand architect of the TVPN aesthetic, watch Spider man no Way Home and say, I like that color. I like that design. Let's bring that into our studio. And the answer, no, no, no. Lots of other influences, but this was actually not one of them. I believe I have some. I like. Yeah, we like the color green. I remember Jordy one morning we were working out, and he's like, we should do green. And I'm like, okay, yeah, that sounds good. I like green. And he's like, no, no one's done green. And I'm like, that's not true. Like, Robinhood is green. There's plenty. He's like, no one in tech. No one in tech has ever used green before. It is a white space in the sense that, like. Yeah, I couldn't think of another podcast with the green, dark green background. And we did find our own space. We looked at Pinterest a lot for different references, some photos, some catalogs. Ralph, I didn't look at Pinterest. What images were you pulling from? Cause I know you had some references. I mean, obviously. Obviously, F1. But just your brain. Just your brain. You don't let much go in there. But certainly not movies. Certainly not movies. But I got to figure out where this spider went. This spider landed. It was on the mic. I lost it. I think it's in. I think that's a good place to call it. Anyway. It is a coincidence. Rob, that's your answer? It looks like it Is. They're up almost 9% after, and the market is way up the NASDAQ7.8%. Should have been in white suits. In white suits. But it's a very sad day because we love situational awareness. They're going through a really hard moment. We're wishing them the best, hoping that, you know, good things come out of this ultimately. But it was. It didn't feel appropriate to wear a white suit on such a road. Yeah, I'm in a black suit. He's in a black suit. Because it's a very disappointing moment. But, of course, everyone has a long career ahead of them, and there are many ways to build back better and do more big things in the future in the world of AI and technology. So thank you for watching TVPN. Tune in tomorrow at 11am Pacific. That's right. Thanks for five stars. And Apple podcasts and Spotify.

On the timeline last night, this morning, around Leopold Aschenbrenner's hedge fund situational awareness, they have been forced to unwind their public stock portfolio after steep losses on infrastructure bets. CNBC reported this on Thursday. Today, prime brokers reportedly rushed to raise cash to meet margin requirements while Ken Griffin's Citadel, my former employer, reached a deal to purchase the fund's publicly traded assets. It can ever do anything to you? No. Like this? No. What? No. You're just an intern. I was an intern. I would, I would have loved to be getting him. But did he ever try to maybe intentionally send the markets into turmoil just to test you? No, but I mean, honestly, the story of Citadel is crazy. I mean after the, the housing crisis, the fund was down 50% and it was a very, very dark time. There were good thing for Ken though. At that time, Ken Griffin, what he would become didn't exist. And otherwise he probably would have eaten the young Ken Griffin alive. Yeah, maybe, maybe. Much like it seems that has done to Leopold. Yeah, maybe, maybe. The other frustrating thing is that they went down 50% I think the next year they went up 50% and, and then, and they were, you know, this is the classic, you know, explaining fun math to people. Oh, you're back up 50%. Great. You're back to where you were. Nope, you need to go back up 100% if you're down 50%, of course. Anyway, so the news. The fund had built concentrated positions in AI infrastructure companies including Nebius, SanDisk, Micron and Coreweave while also betting against software companies such as Adobe. Those trades have as unraveled as AI infrastructure stocks plunged in recent weeks before rebounding sharply today. Now how much of the plunge is around shaken faith in AI's ability to deliver value? Open source or just oil inflation? The Fed's actions. We'll get into all of this because there's a lot of moving, different moving pieces that led us to where we are today. Let me continue giving the news. We then we'll go through the timeline and discuss a little bit more in depth. So also relevant here is from the TBPN newsletter. You can go sign up@tbpn.com and what a bunch of people are pointing out on X is the fact that on Tuesday it was reported that Citadel expected a surprise rate hike from the Fed meeting that took place yesterday, which did coincide with more sell off in the market. So the market has been selling off based on what might happen at the Fed. We reported on the Fed news there were three Fed governors that said we should raise rates, but the rate held steady. But mortgage rates are high, are over a one year high at 6.66% today. Very odd number. But yesterday the Fed left the rate unchanged and today many of the stocks in Leopold's portfolio are up double digits and we'll sort of go through them. They're up today based on the news that Ken Griffin is buying the portfolio, but they are still down over the last month, for example. Sample in many cases Ashenbrenner, a former OpenAI researcher, rose to prominence after publishing his 2024 essay series Situational Awareness, the Billion Dollar PDF, as will Manitis put it, I believe, which argued that rapid AI progress would require an enormous build out of chips, memory power and compute infrastructure. That thesis became the foundation of his investment strategy. After launching the fund, he also engaged he's also engaged to Anthropic CEO Dario Amade's chief of staff. The news is coming in hot and fast. On the story, here's a timeline of the most important headlines so far. So Bloomberg 9:25pm yesterday, I remember, I think you texted me this as I was going to sleep and we were like, whoa, this is big deal. I wonder how, how crazy this will get over the next few days. It got very crazy very quickly. So Bloomberg reported. Leopold Aschenbrenner Situational Awareness seeks to Raise Capital after AI route There was an article in the Financial Times as well last night just saying that, hey, there's some rumors that are leaking out from LPs that they got a letter saying like, hey, the market's down. Now's a good buying opportunity. The thesis is as strong as ever. If there was ever a time to put more money into this fund, now's the time. That can be good. You want to be buying when things buy low, sell high, right? But at the same time, if it's to cover margin calls, if it's because the fund's getting beat up, it's a little bit rougher of a pitch. Then at 6:05am, CNBC announces that investor Leopold Aschenbrenner has been forced to unwind all public stock positions after steep losses, according to CNBC sources. And then the Wall street journal reports at 8:39am that Citadel has stepped in to buy Situational Awareness's stock portfolio after big losses in AI. And so after living through FTX and SVB and now this. Nothing on the timeline? No. It's grizzled. No. The key takeaway is like when, when, when leverage is involved, things just move. So, so, so Fast, Right. You remember with ftx, yeah. There's kind of some rumblings, a couple posts from SBF saying like, we're fine, it's all good. And then it was over. And it is. And then the same thing with svb, like, couple rumblings, maybe like a couple weeks, a week beforehand, a few posts here and there and then it just moves so, so fast. Right. And yeah, quite a bit different than traditional venture world where when a company is dying, it dies over two, three years, often, sometimes more. Yeah, yeah, yeah, yeah. I'm thinking of like, I mean, we had some of these companies on from the private markets where they've gone through big booms and busts like Bird and then they built back and they've turned around, but there's so much more turned around. No lime turned around. But, but, but it took like an extra five years for Bird to actually wind down. And it's because there's no leverage in the system. There's just a bunch of dollars that sit there as equity and those get burned down. But every, every month, if the business is deteriorating, you're cutting costs, shrinking the business, tightening things up, making that 12 to 18 months last 24 months. And then you wind, and then you wind up, you know, 24 months in, you're like, oh, we're not going to be able to raise again. Let's stretch this again. And right. Size the business again. And all of a sudden takes like years and years for these things to unwind. Although they are correlated in the venture world, they can be decorrelated in the unwinding process. And then there can be other things that are outweighing the portfolio. So every VC that had Bird on their books probably also had some SpaceX on their books or something. And so there's this balancing effect and it takes years for these things to balance out. And they can be unwound at different periods in the market as opposed to everything needing to happen all at once. So speaking of public markets, let me tell you about public.com investing. For those that take it seriously, they got stocks, options, bond, crypto, treasuries and more with great customer service. I like this post from Richard Crab, one of my favorite investors. He runs the quant hedge fund Numerai. And he says, I think it's cool that funds like situational awareness can exist in America and that there's a market for them. But the outcome was never going, was never about being right or wrong on AI at 150% volume variance, drag alone is 113% a year. And risk of ruin is roughly a coin flip over the fund's life. A child can do the math on a napkin. Claude did it for him. He says AI says ruin wasn't unlikely. It was roughly even money. So there's a 50, 50% chance, 50% chance that the fund sees so many losses that they have to do this liquidation process. And, and that's basically what happened. And it's, it must be so frustrating because the, this is, it really does not feel like, oh, Leopold was wrong about AI and the AI buildout. It's like, well, there's oil and a war and interest rates and all these other things going on that are creating some jitters. And then also once the AI trade and the infrastructure trade got so big, you wind up with like this retail froth on top. That makes things even crazier. And then all that he was benefiting from, benefiting from. But also it's much harder to do sort of a first principles analysis on what the psychology of a frothy market will do as opposed to just retreating to. Okay, well, there's this, the model progress is progressing like this. And, and token pricing is, is, you know, counting the ooms stops sort of working when it's like, well, will this particular stock become a meme stock? Right, Pull up this picture. There was a lot of this going on this morning. The memes are flying. This is truly like, this was the first meme that popped into my head. If we can pull this up. The chat is asking for a non sponsored sleep score to see how we slept in the midst of a financial crisis. I've been doing pretty well. I got an 87 last night, 92. Scroll up a little bit. There's a lot of this on the timeline this morning. Yeah. People saying, I don't know why the guy's head's cut off, guys. Okay, this was you. No, this, this was just a lot of people on the timeline being like, I knew he would blow up. Yeah, yeah, yeah. Like the armchair experts are out in full force today and in many ways we are among them. So I like to think about it like at least some of the more high profile LPs that in situational awareness, a lot of them are like, you know, great founders. You know, maybe they have big, big positions in the labs and all these different things. And it's quite possible that situational awareness, at least when they invested was like 5% of their portfolio. And they're just thinking like, go giga long. Like, go. Yeah, yeah. For some of these People it might be like 1, 1 less than 1%. Right. Whatever it is. And so it's, it's actually somewhat pragmatic for them to just be like yeah, go crazy, go whatever you want. Yeah, that's the product. That's the product. That's what I want to buy. Yeah, the rest of my portfolio is fine. You're going to have a lot of exposure whether you like it or not. But, but yeah, it's, it, it is actually crazy that it didn't even take a three month drawdown. Right? Yeah, it was, you know, what was it? June, June 1 they were at 45 billion of AUM, something like that was the NAV, I think end of June, end of June, so beginning of July. And then how quickly things can change. And poor Leopold already went through this with ftx I believe. He, he and the rest of the FTX future fund team I believe resigned. Like right When's interesting is people are framing this as like they got pennies on the dollar or Ken Griffin bought the portfolio for pennies on the dollar. And when I think pennies on the dollar, I think like 5 pennies per dollar. So like 5% recovery but it might be closer to like 50% of book value, might be 80% of book value. I don't know. Fortunately we have Martin Shkreli joining in just minute he's here in the waiting room. It's crazy because when, when Martin, Martin was the first account that I saw to post anything like this, he posted it before any mainstream media had picked up on it at all. And there was a bunch of comments on his post saying I have good sources that say this isn't true. And of course Shkreli was right, there was trouble and we'll bring him in now. Let's bring in Martin, Scratch.

Workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish. We have a couple guests coming in soon, but first I want to talk about Ferrari. I don't know, do you want to jump straight into a next guest? No, let's talk about it. I want to debate this because there is news in Ferrari world that the Ferrari EV, the Luche designed by Jony I've has already hit the 2026 sales target. The haters are in shambles. Everyone doubted that this would sell and the Italian carmaker reports strong demand from China for electric model derided for its unconventional design There's a whole bunch of interesting tidbits in here in the Financial Times article. Ferrari has hit this year's sales target for its first electric vehicle on the back of strong demand from China despite a polarizing design to that drew backlash from investors and enthusiasts. Remember, even the former CEO, former Chief Design officer, former executive came out and said this is not a Ferrari. There was a lot of back and forth in the timeline. I could have designed a better one with ChatGPT. A lot of people threw out different designs, but this one is selling at least According to the Financial Times. The Italian group has not disclosed its target for the Luce, but two people with knowledge of the matter said it had aimed to sell this year just under 500 units of the EV. Not a lot, but their goal for by 2030 over the next four years is to get to 2,500 units. So 500 a year for four or five years. That's where they want to get here and they say they're on track and so this is priced at €550,000, 650,000 USD, something like that. One of the two people said the target had been reached earlier in July, just two months after its controversial launch when critics on social media derided its unconventional styling. And there's also an interesting line in here that Ferrari says they gave strict instructions to dealers not to force its traditional petrol loving collectors to switch to electric cars. Said if you want a Luce, we'll give you a Luce, but we're not going to make you buy a Luce in order to get in line for an SP3, SP4, some special F80 thing that's more limited. Just if you want it, it's here. It's a choice and a lot of people made that choice according to these insiders. What do you think? Give me the pushback and then we'll debate it. First, let me tell you about Console while you think about that. Console builds AI agents that automate 70% of it. HR and finance support, giving employees instant resolution for access requests, password resets. I was pausing because I wanted to start with something nice. Hit me, I think. So the videos that I've seen of it on the road, it does look even more strange than in the images. Wait, what is this photo? That's not. What is that? The teenager just accidentally put in some random car? Okay, so the car is strange. I love the interior, but the car overall is strange. It's still unclear to me who it's really for, but they are finding buyers. The idea that, that buying the lucre, like Ferrari is saying, we're not forcing any dealer to push this car or whatever, but the idea that it's not going to have some. Whether or not you bought a Luce is going to have some weight on your future allocations, to me is just insane. There's just no way that that's true. Because every single dealer is going to look at their client list. They're going to look, what cars have they purchased? Like, we know, we. We know multiple Ferrari collectors that are buying two. Two separate cars that they don't even want of the same style in order to gain status within the dealership and show that they're a proper, proper collector and they're properly sort of cherishing the brand. Yeah. And so I'm not at all surprised that they've sold 500ish units. That's about as many as I would have expected for 20, 26. I actually, I guess if you asked me, I maybe would have thought they would have done more like, to me, this was a car that was so different than the rest of their cars. It serves a wildly different use case. I would expected their sales targets to be quite a bit higher simply because when it comes to their really special cars, they make about 500 of them. And so I would have expected at least 500 sales guaranteed. And then you would hope there was a bunch of incremental buyers, people that are like, yeah, I actually don't want a Ferrari sports car, but I do want a daily, and why not go for a Ferrari daily? Right. So you would have thought that there would have been like 500 for the first year was like my very base case, and I would have expected a bunch more on top of that. So I think they're positioning this as a win. I think people are going to love the car if you ignore the price. But I Don't think it's the win that the Pope and the Lucha. It's so good. Okay, three points in response to yours, too. First point. The design's absolutely growing on me. Like, watching these videos here, it just looks way better than when we first saw the first pictures. And I don't know if it's just distance and I'm becoming more familiarized with it, but it looks a lot better. Even the exterior. I've always agreed on the interior. I think everyone agrees on that. But the exterior is looking better to me somehow. I don't know if this is just like, I'm getting used to it. 2. Yes, there are. There are the 4D Chess Ferrari collectors who are saying, I know I'm not getting pressured, but I'm buying one anyway because I think it'll help me jump the line. And I'm doing that independently of any pressure that's coming. But there's also just collectors that are like, this is going to be a piece of Ferrari history, regardless of if they. What if they never make another EV again? What if the. What if the Luce is canceled next year and Ferrari literally for 30 years never makes an EV? This thing is. It's important historically. It's an interesting thing to have in your collection. And then there's also just people that are like, I want. I'm a true collector. I want every possible Ferrari experience. Give me the suv, because I want to see what that's like. Give me the mid engine. Give me the front engine. Give me the electric. Give me everything. Give me a vintage. Give me a new one. Give me a road car. Give me a track car. Give me. I want a Ferrari F1 car. Like, I'm just. I want all of the experiences because I just want to experience everything Ferrari because I'm that deep with the brand. So there. And are there 500 of those buyers? Maybe. And then lastly, the question of, you know, what was their goal? I don't see this as their auras. I don't see this as they were trying to make a mass market daily. I think that they were trying to make a very iconic, very iconoclastic, very contrarian car that was bold and weird and different, and it happened to be daily able. And the fact that it is daily able is what is weird about it. Like, they're not known. The brand is not known for being able to be dailied, and yet they made one. And that makes it weirder. And I don't think that they were going after. This is something that will be like a Lamborghini Urus, which they can sell in mass volume and completely change the profile of their sales curve. My view is that they. I think those are all great points. My view is that I don't think they should have done a car like this because I do think it hurts the brand unless it was going to drive so many sales that it could make the rest of the cars that they make better. Right. Like what the Cayenne did for Porsche or what the Urus does for Lamborghini. Right. This sort of, like, workhorse product that can fund a lot of the other cars that are more Halo cars. And so, yeah, I just. I don't think it makes sense if they sell 2500 units other than it solves their sort of European, like, emissions standards issue. Right. Yeah. I do think a lot of people buy a Urus because they want a Lamborghini, but they need a daily. And so they go with that because it says a lot. It's a very bold choice and I don't think that's the calculus here because you're paying so much more. Whereas I believe the Urus is cheaper than most of the Lamborghini sports cars. Whereas this is substantially more than just going and getting a ts. Yes. And Ferrari has an SUV that is cheaper than this is significantly cheaper. And it is much more desirable to the Ferrari clientele because it has a naturally aspirated V12. Yes. But at the same time, the Purosangue, the SUV that you're referring to, had a lot of pushback when it came out. So did the SF90. And they all look really great now. And so the anti halo car theory also holds. But I think it looks good and I think it's going to turn heads in a weird, weird way that very few cars, as we are collapsing and we're getting to. Everything is white, everything is gray, everything is black, everything is the same rounded. The. Can you tell the difference between a McLaren or a 296 or a Lamborghini? They're all sort of starting to look the same, like supercars. And then there's the whole hypercars, the Batista and the. Yeah. I'll give you this. I think certain specs of the Luce are going to look. They're going to look funky, but they're going to look cool and they're going to be a joy to drive. I just like that. Jony, I've in the Financial Times, they sent this photo of him looking over. We got to pull up the Go to the Go to the Financial Times article. Scroll down to the picture of former Apple designer Jony I've who designed the Luce. And he's just like. He's like, what did I tell you? You doubted me. You doubted me. You doubted me. You doubted me. We couldn't sell 500 of these. We did. It's a true. It's a true victory lap photo and I love it. Yeah, Great photo anyway. And I. And I can't wait to see one in person. I'm excited too. Let's not keep tell you about Figma first and then we'll bring in our next guest. Agents. Meet the canvas. Your AI agents can now create and modify your Figma files with design system context. And we have Guillaume.

Did he work out some kind of deal to get it confidential? But it, it sounded like you just like didn't get around to it. They had other priorities maybe. Do you think you can mention the, do you think you can rebuild a career as a venture investor? Because like in venture you just, you're just like gig along always. Like, it's like, you know, one of the few forms of investing where it's just so hard to get out of positions. That's the thing. I mean, why become a hedge fund manager? This is the. I have a friend who wants to start. I have a friend who wants to start a hedge fund. I told, this is the most painful, horrible business in the world. Why do this? And if you start a newsletter business that makes 100 million a year, even 50 million a year of revenue, you've done better than almost every hedge fund on the planet. Like, you do not want to do this job. And the reason, you know, the reason people do it, and I did it too, and I would never do it again, is it's the sexiest thing in the world. You think you're you, you know, the master of universe is incredible. Yeah, you're the master of the universe. And I had friends wanting to quit really high profile jobs to be a hedge fund. I was just like, you're out of your mind. You don't know what, what this job is. It's waking up at 3am checking Korean stock prices and you know, waking up back up at 6, you know, wondering what's, what's happening in the world, stuff like this. And there's absolutely no productive thing you're doing. You know, you're providing capital, you know, other than that, you know, you're really playing this high stakes crazy poker game. And you know, it's certainly fun and interesting, but when it's painful and raw, I hope he'll do something. You know, he's a brilliant person, really. People like that. I mean, look, Peter Thiel had a hedge fund that didn't quite have this level of liquidation or anything like that, but it had a rough last few years. And you know, Thiel was able to obviously not only continue his venture investing efforts, creating one of the biggest funds of all time, one of the most successful funds of all time. Investing personally, doing amazing. Also getting back into macro trading with Teal Macro, which supposedly has done well. So I do think there is this period of a few years that he can reset and take the learnings, take whatever talent, skill, and certainly genius that nobody denies that he's a brilliant guy and rebuild. I don't think it's the end at all. And I hope he's keeping, like, that even temperament about this, because, you know, I think a lot of people respect him quite a lot. No matter how this turned out, you know, he'll be back and successful. But it is a little bit of a humiliation thing that I think most people on Twitter and other places are sort of saying, well, the market tends to humble you. And this is like an extremely humbling moment from being, you know, just two months separated from the biggest hedge fund on planet Earth and most successful to being forced to sort of liquidate. That is quite a rapid sort of, you know, reversal. Also just imagining what the fund looks like in two or three years.

Is it has a chance of happening on the bullet. So you're saying there's a chance. I love it. Can you give me a little bit more insider baseball on what it takes to unwind a big position as a shareholder? Because a lot of people who are not inside the hedge fund world are sort of maybe confused around, OK, yeah, you own $50 million of a $1 billion chip stock. Can't you just dump that on retail? Can't you just like sell markets, sell that on E Trade or Robinhood? And in fact, it's much more complicated when you're at this level. Even though it's public markets, there's not just a big button. Can you walk us through what it actually takes to like, sell a big position when you're at that level? Yeah, there's, there's a lot that goes into it, interestingly. So the first is you have this advertisement system. So if you sell into the, into the market, you can try that and those. That's called selling into the screens. The screens are the numbers on your screen. Anybody could buy and sell Robinhood, whatever. So you don't normally do that. If you, if you can help it, selling on screens is at least somewhat quiet. You can just sort of trickle out. There's always this conspiracy that as I'm selling on the screens, there's some guy who can see my screen and he's like, this guy's got a V wallet, market order to sell 10 million shares. That's not, you know, I'm going to tell somebody. And that knowledge would be very, very powerful. And there's even some even crazier conspiracies out there that quants could actually use different, all kinds of insane ideas around what they can do to sort of sniff out that this is happening. So there's people that are scared of that. Then you can pick up the phone and this is the way you'd normally do it. And you call Goldman and you say, listen, I need to sell 5, you know, 5 million shares of Microsoft or something like that. And they say, hmm, you know, should we take it or do we find a guy that wants to take it? And they'll sort of try to decide. Now, Microsoft is easy. If you're trying to sell Sharon I a Neo cloud in Australia that nobody wants, that's a tough one. And you own like 10 days of volume. So if you try to hit the screens, you have 10 days of volume. You have to be the entire volume for 10 days before you'd be out. You'd probably take the stock down 50% or more. And you don't want to do that. So you try to do this advertisement process. And you basically can post in the stock market that you are a seller of a stock and you can post that your four digit, what's called Market Maker id. And so Goldman's is gseo. So GSEO would be a seller of, say, Nibius, which was one of his positions. And so you'd call up, you'd say, okay, Goldman, I'm a client too, of Goldman. You know, what do you got on Nebus? And the guy would say, listen, we got a pretty big seller here, you know, and say, how big? You know, half a million shares. And you say, a lot bigger, you know, so you'd say, okay, because they have to advertise that, you know, they're working your order. So they have to sort of tell people that there's a seller. They kind of are trying to be coy about how big, but they're not going to waste somebody's time either. So the guy who's heard that there's a big seller, well, he might turn around. He's not supposed to do this. He might turn around and say, there's a huge seller of Nubias out there and I'm just a little baby fish. Maybe I could short 50,000 shares and get in front of this guy. If you're an actual interested buyer, you might also still be nervous because you'd say, well, if he's really got a ton of size, I might have to be judicious about how I step in. If you combine that with the pressure in the market and you add it all up. And then usually what you do is you'd have say, oh, I know a guy that works there and let's see if he's returning calls. And you know, when you hit up the guy and he's not on Bloomberg, he's hard to reach. It's kind of like, well, it sounds like it could be them selling. So it's not too many people that own that many shares of that security. So you look at the holders list and you're sort of like, who could it be selling 10 million shares? So you call Fidelity and they say, no, we're not selling. You call the next guy. No, we're not selling. Next guy is an etf Next guy's index fund. It's got to be him if it's them. And then you start noticing all of their positions are down. It gets really hard. Ultimately, the bank decides because you might say, I Don't want to sell. The bank says I don't care what you want, we're selling regardless. Goldman Sachs is not in the business of holding AI stocks. We're going to sell at any price we can because our board would rather know for sure that we're down a billion and just take the rip the band aid off then to wonder if we could lose 50. And so it's Goldman's position that we're just going to just cut this, cut the arm off right now before it metastasizes. And so they'll do a fire sale and of course Goldman smart they're going to reach out to a guy like Citadel or somebody else to place it carefully. But selling the whole portfolio in one shot was a very smart move. Now again we've heard the discount could have been as big as 20 to 50% which is mouth watering discount to buy some quality companies at. But to end it and have finality what was really to answer the question finally what you really needed to do is the buyer of these stocks has to have the liquidity to hold them for five years and do nothing because the market guys like me and to a very small extent and guys too much bigger will sit there and say I don't think you can hold this. And they'll start shorting it and shorting it and shorting it and trying to make you cry uncle Kyosha. In Japan, one of Leopold's holdings, also one of mine, is trading at 3 times earnings. You know they basically forced you, you're forcing the guy to, to really, you know, to sell. And if you're going to hold this stock, you have to make sure that you can hold it until it's 2 times earnings or 1 times earnings. And the only player big enough and more powerful enough to sort of hold $100 billion and not blink is somebody like a Citadel. And even still some people rumors out there there are the people who are going to try to rush your Citadel, which I wouldn't advise, you know, but something like that where you know, maybe they'll now have to suffer the same contagion. So it's a very crazy time in the markets and I don't think we've seen everything yet because I do think there are some large tech funds that have had the same trade on. I do think liquidation is over thankfully. But I do think that there are some funds that are about to be found out to be down 30% or down 40% or something. Take me through the mind of Ken Griffin.

May just get more insane as we learn more. Is there a world where the fund continues? Because I'm just hearing the numbers and it's like, you know, for up at 45 billion, the actual money into the fund was maybe 5 billion or something. If you sell the position. Right, right. There's a world where you wind up with, like, 10 billion in a bank account. And the LPs are like, well, we gave you five. Keep going. Get back in the game. You know, I hope. I hope that's the case for the LPs, who are awesome, for the fund manager, who obvious got quite a lot of whiplash. But at the end of the day, there's this concept on the street. As you guys know, once there's blood in the water, these positions would go to zero. We'll send Micron to $5 just to eliminate this guy at 3. The craziest thing is, that's the nature of Wall Street. When this happens and there's a guy that has to sell 100 billion, you'll have a trillion dollars in front of them. Just like, you know, let's. Let's see this guy cry uncle. And it's the saddest, kind of most Machiavellian thing, but, like, he had. He sort of had to blow up, you know, There was no other ending, sadly. Yeah, because of the leverage level. It's just like, one slight. You know, I remember my old. My old boss was a tiger. Tiger portfolio manager. Reminded me of the 2000 era, where there's this very slight change in tone from one optical component supplier. And that's like, him and his partner from Soros just decided to go, like, as short as they could because they knew ultimately these vulnerable hands were sort of sitting there. After the easy part of the bubble was over, you had this like, okay, well, what's next? Things have to get a lot crazier. You saw Dwarkesh's tweet. Things like that would have to sort of happen for there to be enough second derivative for somebody to be surprised. You know, everyone knows AI is in this boom. Everyone knows chips are in this boom. What could possibly shock you to the upside? Not much. So if you hear any little, like, you know, we're not going to spend as much, the whole shit hits the fan and every. It's just too heavy. So I actually wonder if we're, you know, if we're not in for a longer, more protracted decline. Things feel great today. You know, you have this huge boom, this relief rally. A lot of the froth is out of the system. But you know, what next, you know, I don't know that, you know, a patient and calm market is going to emerge because you had the hyperscalers and the big companies, they fomo, too. They FOMO just as hard as Leopold did, right? If not harder. So this isn't just him. It's the whole world collectively saying, fuck, I gotta. I gotta go all in. And AI. And it's. It's. And who. Who had the guts, you know, other than one man, Tim Cook, in the back saying do nothing. Yeah, yeah, no, really.

But does every. How common are those clawback clauses? Because you have to imagine in this fundraise he had like massive, massive leverage. You know, like demand was very high. Demand was very high. That feels like a term. The numbers were so good. Yeah, it's a more institutional thing. And I, and you know, speaking of which, you know, obviously the guy basically had no experience. And again, you know, in times like this nobody wants to grave dance and I'm not doing that. But I had some institutional friends, one of the biggest fund of funds in New York for example, who passed on Leopold basically laughed at him and said there's no way I could invest in this. And of course he goes on this tear, makes 20x or whatever it was since inception and does fantastic. And he feels sort of sheepish but ultimately somewhat vindicated after all of this. So you did have a manager that had no experience. Kind of a long only or extremely long biased starts to do privates, which for many hedge funds is kind of the death knell. You know, when hedge funds put on their VC cap and try to try to do what those guys do, it often doesn't end well. And that goes back like 50 years basically of hedge fund history and very few people have been able to do both. And the other thing I'd point out is we're going to see July numbers very soon here from quite a lot of hedge funds that I think we're in the same trade. Sure. And so this, this is not just Leopold's 100 billion gross. It's like that times maybe 5 or 10 and the mark while the market's liquid, that's a lot of downward pressure in a few weeks. And you know, it's amazing to see this all compressed in a month. Whereas like the dot com bubble took three or four years to like patiently go up and patiently go down. You know, seeing that compress instantly is interesting. What's going to happen next is really going to be fascinating. There's some theory out there that you know, that we see all time highs again now that all this liquidity is out. And there's other theories there that we actually were just having this nice big downtrend and that this liquidity pop will fade and will be back down further and further. You know, nobody knows what will happen. But it's certainly while you're right that you know, the anthropics and OpenAI's are having record business results. So is Microsoft and Google and matter for that matter. There's still, I think some more discerning questions about is or is this capex investment worth it? You know, they rewarded Microsoft for being prudent. They punished Metta and Google for not being prudent. So one wonders what what the future will bring there. But yeah, not as crazy as things have gotten on Wall street in many years, probably at least since rtx and certainly crazier than the the sort of tiger softbank venture boom of 21 and then, you know, really since then the await insanity. So it's quite a spectacle and I think no matter how much people want to learn the lesson of leverage over and over and over again, we all seem to repeat it and it is what it is. But I think the Jane Citadel Millennium entire hedge fund complex becoming this shadow bank is quite interesting in that these guys are are sort of there to Normally the banks would sort of take this on the chin, but now that there's other folks who are like, you know, Jane was an lp for example, reportedly was not interested in bidding, which is fascinating. May have taken the anthropic, however, really unclear. We're going to learn more obviously as some days go on here, but it's an unprecedented time and you know, really an insane story that may just get more insane as we learn more. Is there a world where the fund continues because.

All the talent. Yeah, they wanted to do it. Enron as well. I think they just sort of, Ken is very smart guy, sort of shows up and says you know how can I, you know how can I you know be a partner to the Goldmans and the bank of Americas when they need to get out, you know of a really risky position they basically take, take over the book. Right. So if you, I'll give you sort of an example. You're asking the question. So let's say you're at 45 billion to sort of try to trace this back and you're 10 billion of that is in anthropic from what we understood. So you have $30 billion of cash in your bank account and running forex levered means you have 120 billion gross market value. So if your GMV drops I don't know 25% that doesn't sound so bad. At 120 billion maybe that's I don't know, 30 billion. So you're down to 90 billion. But that's not your equity. Your equity drops from 35 billion to 5 billion. And no prime broker is going to let you keep 90 billion of gross market value because once you dip your equity below zero it's their loss, not yours and they're not going to lose a penny after Archegos and after these other blow ups and that's not their job. And they kind of have the right to take over your portfolio which is sort of you know something I hope nobody ever asked to experience. But they basically call you in and say listen, you know these are our, our assets now you know we're going to decide what, what their disposition is going to be. And the rumor is over the weekend he contacted about 10 parties to place anthropic in an effort to shore up liquidity. Selling the anthropic stake for, for allegedly the offer was at 1.1 trillion equivalent market cap which you know is I think roughly where it's trading and you know it's unclear whether that was sold or half of it was sold is what we reported that that half of it was sold. It's still a little unclear who bought that. What's happening exactly. But that's, that's the best we've got. And then you know when it came to the public book it does sound like the buyer of that book basically got a, from what we were told a 3 to 4 billion dollars insta markup. So they basically now have to work them work out of 3 to 4 billion more than 3 to 4 billion, quite a lot more. But in essence, if they work out of these positions without disrupting the market, they'll have printed 3 to 4 billion on the trade, which is unusual and interesting trade, but, you know, really exciting. One of the parties reached out to me last night, one of these three parties, interestingly, after my reporting, and they said that in essence, at some substance, yes, Leopold flew a little too close to the sun and your numbers are a little off. And I asked what direction and they wouldn't. They wouldn't confirm or deny. I received a lot of pushback on the reporting to your point, privately and publicly, that, that it's not so bad and that he's only down 30%. 30% you can live with. But also, if Anthropic hasn't changed its mark, that means you were down 60 in the public book. If you're forex levered, that means you're down 15 on the public book, which sounds too good to be true. If you're trading these stocks, they were down 15% a day. We've also heard the other AI funds are hurting. Maybe not as. As much as in trouble, but certainly hurting as well. Where does the fund go? He gives some good cover to all the funds that were effectively.

Fund, which is. That's a lot of leverage. You know, a 25% drawdown takes you out of business. Interestingly, we heard that three firms were bidding on the assets. So Jane Street, Millennium and Citadel were sort of brought in a closed, closed circle sort of late Friday to. To bid on the remains of the firm. And we got offered a look at $100 million of anthropic stock, which we were puzzled by. Sometimes you see these SPVs sort of interest comes across here and there, and we thought that was interesting. I sort of raised my eyebrow and said, Leopold, because sometimes when you want to sell $4 billion or something, you don't come out and say you want to sell 4 billion. You come out and you say you want to sell $100 million of it. And usually a guy who wants to buy 100 is enough to buy 500 or more, and you sort of fill them out and say, here's 100. Okay, do you want five by any chance? And then, you know, your eyebrow starts to raise a little bit that, you know, maybe he's got even more now, of course, this is a really odd situation. So we heard Millennium did put in a bid. Citadel's bid was better. You know, I think Ken wants to be the guy that everyone goes to when they're in trouble, and that's the Buffett is getting older. This is not the kind of stuff Buffett wants to do anyway. But Citadel did this in the know. When Amaranth blew up natural gas futures, I think Citadel took that portfolio and virtually every blow up in finance, Enron.

Hoping to cause a panic and a crash. How do you trace back the start of this correction? Is it the war? Is it oil? Is it jitters around open source or just hyperscaler? Capex? There's so many different narratives around why the AI infrastructure trade, the bottleneck trade might be weakening. At the same time, it feels like there's some really solid progress and the models are progressing along like pretty like as expected. Yeah. You have the labs having some of the best months in business history of any companies ever. Yeah. But then all the infrastructure correcting and none of that stuff matters. You know, the only thing that matters is, is the propensity of the buyer and seller to buy or sell. And what you had happen was the smart guys getting early start buying, see the prices go up, buy some more, and then less smart guys take, take note and say, I want to do that. I want to be up 400% this year too. Guys like me started buying right near the top. Hey, this is great. I love memory, I love bottlenecks. And then, but by the weakest hands are buying at the top. So they're also the first to sell. Sure. First to panic. And it just creates this like, you know, every bubble sort of the same. You have this euphoria, this peak. And then, you know, everyone sort of panics at once. You know, the fundamentals basically don't make a difference. You know, I think they, you know, they sort of drive the marginal buyer and seller. But, you know, the 80 or 90% of the assets, shareholders don't change hands. It's that 5% of the margin that's deciding the price. And if that 5% is in the state where they're levered up 3x or 4x, as we heard, SALP was a 4x levered fund, which is, that's a lot of leverage. A 25% drawdown takes you out of business. Interestingly, we.

How's your last? Take us through it. 24 hours. 24 hours been like for you? It's been interesting. I do invest myself, so it's been probably one of the craziest months in Wall street history. I was talking to some friends last night about Long Term Capital Management, Amaranth, other famous liquidity driven blow ups and this is up there. And yeah, it's just a really crazy thing. We had heard rumors sort of mid last week and then they really started crystallizing last night and this morning. Obviously sort of a fait accompli. And I actually think they did a wonderful job of, of keeping it relatively quiet. I think some players were already positioning say early in the week, Monday, Tuesday, looking to do what my old boss Kramer used to call, you know, shooting against a fund. So if you know somebody has to liquidate, the best thing for you to do, unfortunately, sadly, Darwinian, is to go sell all the positions you have in common and go start shorting everything they have. Yeah, and it accelerates the, the sort of downfall as quickly as you can. And this is a very common practice when these things, you know, happen. Certainly not something I, I had overlap decisions with them, so certainly not something I would do. But know a wide number of funds that were shorting all of these stocks hoping to cause a panic and a crash. How do you trace back the start of this? Correct.