Some quick context: 1. NBIS closed at $148 yesterday. 2. It was down 37% from its June peak. 3. Short interest elevated to 25% of float which is very high for this stock. 4. The Situational Awareness fund held a 5.6% stake of $NBIS and was forced to sell its entire public equities book to Citadel before the market opened. Most people expected that news to crush the stock further, but the opposite happened. NBIS closed up +27%. Here’s what I think happened and this rational was also confirmed by TipRanks and the WSJ. The Situational Awareness fund liquidation happened in a single block trade to Citadel before 9:30am. That matters because it eliminated the market’s biggest fear: a panicked, huge supply of a concentrated AI book hitting the market in pieces over days or weeks to deleverage and save the fund. Instead it was absorbed cleanly, in one trade, before the open removing the aggressive reason to sell. When the market opened green on Microsoft’s record session the short sellers across every neocloud name simultaneously faced a big problem: The SA overhang was gone, the semi rally was running, the $1B Reflection AI compute contract for NBIS had just dropped, and they were still short 🏴☠️ CoreWeave, NBIS and IREN all surged approximately 27-30% on the same day for the same reason the short sellers covering into a rising tape with no forced selling pressure left in the market. Now yours truly was holding the 2X leveraged NBIS ETF $NEBX when this happened 😅😅 cause the wolves skewered me all month long and I really wanted to hit back for once 🥊…. And BOOM up +54% in a single day and another +8% after-market. 🤑🤑🤑 We’re not out of the woods yet, we need the momentum to continue delivering Higher highs and Higher Lows for a few more sessions before we celebrate 🤞🤞🤞 Do not do this at home!! Not financial advice.
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12 Comments
Andrew Whiteside@dumbmoneyrewired · 19h
Citadel manipulated the whole thing for sure....they are sore losers from Gamestop GME.....and wall street never forgets losing to retail. They wiped him (leopold) off the map because he got greedy and thought they were his friends. Then Citadel made bank today
Marsia @gnomishness · 20hEdited
Holy crap you were lucky! I guess we all were, because if NBIS fell hard, I bet it would have interrupted the start of the recovery for tech stocks as a block. I read Leopold Aschenbrenner’s paper on the picks and shovels stocks of the AI race and bought a bunch of those. But I didn’t realize his whole portfolio was packed with high beta stocks coupled with him shorting software stocks that have been leading the switch back into tech stocks the last few rotations. I guess he won’t do that again!
Michelle Womack@spartangreen · 21h
Moe my man!!! You rock star 🌟 Who is The Situational Awareness Fund and how do they make a trade before the opening and not have it go viral?
Lovable Grandpa @grampy · 16sec
LEVERAGED ETF!?!? i am DISSSSSAPPOINTED IN YOU YA LIL WHIPPER SNAPPER
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