Speaker 1: We got it. We got the message from h Q
Speaker 1: that Citadel actually brought a lot of Microsoft stock. And
Speaker 1: that brings us to this story of Leo. I want
Speaker 1: you to tell his story and then I'm an I'm
Speaker 1: gonna add the animation to it.
Speaker 2: All right, all right, okay, so let's talk about Leo
Speaker 2: bo Uh. I'll put it like this. This is somebody
Speaker 2: who is super intelligent, obviously worked for open Ai, left
Speaker 2: the company, decided to create a hedge fund about a year,
Speaker 2: maybe eighteen months ago. But the hedge fund was based
Speaker 2: on investing in AI infrastructure. The AI story a lot
Speaker 2: of energy, a lot of semis inside that, and the
Speaker 2: portfolio was like again, started about eighteen Let me tell,
Speaker 2: Let me tell the story, which one, which part all
Speaker 2: the whole thing.
Speaker 1: Let me let me just tell the animated part of it,
Speaker 1: and then you add the technical part of So Leo.
Speaker 2: So, once upon a time was a guy named Leo Leopold,
Speaker 2: which I don't even like the name, but that's another story.
Speaker 1: Leo super smart dude, but not really a background in finance,
Speaker 1: working in open AI and starts at hedge fund and
Speaker 1: really studies the stock markets. He sees where this thing
Speaker 1: is going as far as chips are concerned, and becomes
Speaker 1: an overnight sensation as far as investment is concerned, giving
Speaker 1: you the abbreviated version, starts a hedge fund and within
Speaker 1: like eighteen months grows the hedge fund. Grows the hedge
Speaker 1: fund to forty five billion dollars.
Speaker 2: From two twenty five two hundred and twenty five million
Speaker 2: to forty five billion, and about little over eighteen months.
Speaker 2: There's the company's He invested in, cor Weave, Nibius, Slarris,
Speaker 2: applied with Digital Court, Scientific, Bloom Energy, Iron, Micron, sand Disk,
Speaker 2: just to name a few.
Speaker 1: So his hedge fund was crazy. It was up like
Speaker 1: four hundred and fifty percent over the year. It was
Speaker 1: just he was the everybody wanted to invest with him.
Speaker 1: He figured it out the code for Wall Street, and
Speaker 1: he's invested in all those companies, all of those companies,
Speaker 1: all the companies that had crazy run ups. And he
Speaker 1: was doing so good in life that he actually decided
Speaker 1: to get married.
Speaker 2: He didn't get married, he did. He got married this weekend.
Speaker 1: I understand that. So that's what I'm saying. So he
Speaker 1: was on a run. He's on a hell of a run.
Speaker 1: He's a billionaire overnight. His portfolio that he's managing, his
Speaker 1: worth almost fifty billion dollars. He's got his investors four
Speaker 1: hundred and fifty percent over the year. Yeah, gets married,
Speaker 1: sets his wedding to get married fair. It's a whole
Speaker 1: it's a whole situation. And he even put a thesis
Speaker 1: out last month saying like, this is a generational by
Speaker 1: opportunity for all of these companies that Da Da Da,
Speaker 1: And it's like, man, the biggest gangsters, they all live.
Speaker 1: It's on Wall Street. That's why I was so fascinated
Speaker 1: with Wall Street when I was a kid, because I
Speaker 1: would watch these movies and the way that they would
Speaker 1: just move like vultures and sharks and piranhas, and it's
Speaker 1: just so it's just so ruthless. So one fatal mistake
Speaker 1: that he made is that he over leveraged himself. You
Speaker 1: tell you guys that all the time he was doing
Speaker 1: so well, that he started he started playing a leverage game.
Speaker 2: He made a few mistakes. He made a few mistakes.
Speaker 2: The leverage game was number one. I think investing in
Speaker 2: those companies early was the smartest thing he did. He's
Speaker 2: very intelligent. As he's making the money he decides to
Speaker 2: start shorting other positions. Right, so when you're short, you're
Speaker 2: making puts in that these things are going to depreciate.
Speaker 2: But you got to realize when you're in this space,
Speaker 2: especially at that billionaire club, like you're managing that money,
Speaker 2: type of money. Your supporters are watching, but the people
Speaker 2: who you're taking money from and taking customers from, they're
Speaker 2: also watching. I think he might have underestimated that. In fact,
Speaker 2: I definitely know he underestimated that. Because this is great
Speaker 2: when you're the golden child and hey, this is a
Speaker 2: new hatch fun. This kid is twenty five years old. He's,
Speaker 2: you know, the wolf, the real Wolf of Wall Street.
Speaker 2: At this point, the old guard is looking at it like, wait,
Speaker 2: how's he getting these returns? Number one? Is he taking
Speaker 2: our clients? Number two? And how can we stop him?
Speaker 2: Number three?
Speaker 1: It's like it's like the as No so on back
Speaker 1: in the days. It's like when we first started, nobody
Speaker 1: noticed us, nobody gave a shit. But the bigger we get,
Speaker 1: the more we're taking from other people. So he starts,
Speaker 1: he starts to take market share, he starts to leverage,
Speaker 1: he starts to be very vocal. He has to be
Speaker 1: taught a lesson. So all of these stocks that he
Speaker 1: invests in all of a sudden have historically bad month. Yeah,
Speaker 1: down thirty five percent, down, forty down, fifty percent, historic
Speaker 1: drop in the portfolio, which forced simultaneously.
Speaker 2: Simultaneously, as the stocks are dropping, the ones that he
Speaker 2: puts shorts on are appreciating, right, So those companies are
Speaker 2: actually going up in price. So like if you look
Speaker 2: at a Service now which is shorted, it's going up
Speaker 2: in price. You look at a Microsoft going up in
Speaker 2: price again, that software basket, he will shorten it. And
Speaker 2: so they looked at it and sall right, well he's
Speaker 2: shortened that, and he publicly made that public. Okay, let's
Speaker 2: go put some capital in there to have those companies rise.
Speaker 2: So as he's saying like that's gonna go down, those
Speaker 2: companies are going up, and he's putting big bets on
Speaker 2: this to appreciate those are coming down drastically.
Speaker 1: So as so he's losing money left and right. He's
Speaker 1: losing money. He's losing money because the stocks just keep
Speaker 1: going down. MU going down crazy, saying this is going
Speaker 1: down crazy. So these is billions of dollars this portfolio
Speaker 1: is now in the red. And what happens when you
Speaker 1: can't lose any more money. The bank wants their money back,
Speaker 1: so they start calling his margin costs, which forces him
Speaker 1: to liquidate stocks in mass and it gets so bad.
Speaker 1: It gets so bad for him within a couple of weeks.
Speaker 1: Last week he was faced with the predicament that he
Speaker 1: had to liquidate his whole entire portfolio. And who called
Speaker 1: him the godfather Ken Ken Griffin.
Speaker 2: Yeah, not that kN Griffin, the real Kan Griffin, Griffin,
Speaker 2: Citadel Citadel's Kan Griffin, Citadel's King Griffin.
Speaker 1: If you don't know who he is, google.
Speaker 2: The one of the wealthiest people on the planet, their godfather.
Speaker 2: Last year he brought in thirty three billion dollars thirty
Speaker 2: three billion.
Speaker 1: The boss of all bosses gave him a call, I
Speaker 1: believe it was Wednesday, this happened, yep, and said, look,
Speaker 1: I know that you you know you're in a bad
Speaker 1: spot right now. I'll buy your entire portfolio, probably thirty
Speaker 1: percent on a dollar, got a deep discount, brought his
Speaker 1: entire portfolio.
Speaker 2: But he was allowed to keep some of his portfolio.
Speaker 2: We gotta give him on all FI ten he had,
Speaker 2: so he has private investments. He was invested in and anthropic.
Speaker 2: They allowed him to keep that. But the margin call.
Speaker 2: And this is why we tell people like yo, be careful,
Speaker 2: don't don't play with margins, because when it margin call happens,
Speaker 2: you don't have that capital. They're gonna call you once
Speaker 2: and they're not gonna call you again. They're just gonna
Speaker 2: start liquidating the portfolio in general. So if you had
Speaker 2: ten thousand shits or something, you're like, oh no, I
Speaker 2: don't want to sell that because I'm trying to hold
Speaker 2: onto that I can get the money. Say what, They're
Speaker 2: gonna call you once. They not calling you again. They're
Speaker 2: liquidating everything they can to get their money back.
Speaker 1: And what so what happens? Okay, so he's had a
Speaker 1: terrible moth. His portfolio goes down forty percent, the margin
Speaker 1: calls get called. Ken hits him in the middle of
Speaker 1: the night like, look, I'll take this off your hands
Speaker 1: because you have to get rid of it. He really
Speaker 1: has no option at this point in time. They squeezed
Speaker 1: him out. He had to sell. He sold his He
Speaker 1: sold the majority of his whole portfolio to King Griffin
Speaker 1: and the next day are his historic rally, A historic
Speaker 1: rally happened the next day.
Speaker 2: I think as the news broke, the rally was happening.
Speaker 2: That broke like Wednesday morning, and by nine thirty you
Speaker 2: just saw a reversal on all these these companies. Mike
Speaker 2: Crown was up twenty percent, saying this up twenty seven percent,
Speaker 2: Western Digital up twenty percent, Coral were up fourteen percent,
Speaker 2: Idyots up fifteen percent. Then, I mean, the timing of
Speaker 2: it speaks valumes.
Speaker 1: And you know what the craziest part is, it was
Speaker 1: a week before his wedding.
Speaker 2: A day two days. He got married this week and
Speaker 2: he was supposed to get I don't know if he
Speaker 2: got married this weekend, but the wedding was supposed.
Speaker 1: To be the week So allegedly Wall Street plotted against him,
Speaker 1: tanked stocks on purpose, squeezed him out of his position,
Speaker 1: brought his portfolio for pennies on the dollar, then skyrocketed
Speaker 1: the stocks back up the very next day, and that
Speaker 1: he lost his portfolio. He got squeezed out of thirty
Speaker 1: five billion dollars and they And the cold part about
Speaker 1: it was it was two days before the wedding.
Speaker 2: Filthy. Now it's filthy for so many reasons. Obviously, the
Speaker 2: money being an intelligent investor here would have helped them
Speaker 2: out tremendously. But the idea that you want to get
Speaker 2: into positions, especially from retail investors, we always talk about
Speaker 2: getting in these investments and a good time watching the
Speaker 2: moving averages, checking volume. Imagine at the institutional level, as
Speaker 2: they're watching a SanDisk get up to twenty two hundred,
Speaker 2: or they're watching a Micron get up to thirteen hundred,
Speaker 2: and they weren't big on those stories early on, they're
Speaker 2: sitting asking themselves the same thing. We're going to get
Speaker 2: a better price for that. We're going to get a
Speaker 2: better price for that. In fact, allegedly we're going to
Speaker 2: make sure we get a better price for that. This
Speaker 2: guy is becoming a golden child. He was big on
Speaker 2: these stocks. He's run up to forty five billion. We're
Speaker 2: going to make sure we get better prices. And better
Speaker 2: prices came in July. Now we could say it came
Speaker 2: at his cost, but it came at a lot of
Speaker 2: our costs. A lot of us are in those Micron
Speaker 2: calls and have shares. A lot of us are in
Speaker 2: Sandus and have those shares. A lot of us, you know,
Speaker 2: and blew them and we were in these courts core
Speaker 2: we and so as a retail we just take the
Speaker 2: brunt of that. Now on the flip side, was he
Speaker 2: wrong in his investment strategy? Partially the companies were right,
Speaker 2: they're spot on right. If they weren't, Citadel went and
Speaker 2: came and said, hey, let me get that portfolio. So
Speaker 2: they got the portfolio with all those companies at a
Speaker 2: really good price, and now they have that into the future.
Speaker 2: He didn't have time because number one, he had margin.
Speaker 2: He was way over leverage, right, and he used margin
Speaker 2: to get a scaled approach to his investments. But this
Speaker 2: is this is the crazy part. As he's selling it.
Speaker 2: You know what he's doing the same day putting out
Speaker 2: a letter to say, you know what, I'm gonna start
Speaker 2: a new fund and we're raising capital. I'm like, this
Speaker 2: is like how the world work.
Speaker 1: Its orange story of killing. You fucked me out of
Speaker 1: thirty five billion. I'm gonna need my payback. I'm gonna
Speaker 1: need mons the day before my wedding. Now it's all
Speaker 1: for life. It's smoke for life. Now now I'm on
Speaker 1: a whole different look. The dude he gonna be back,
Speaker 1: learned his lesson. He learned not to overleverage himself. He
Speaker 1: learned to probably be a little bit more quiet about
Speaker 1: his moves. Look, he took it. It's a major it's
Speaker 1: a major loss. But he's gonna have a comeback because man,
Speaker 1: that's the origin, that's the make up origin story right there. Man,
Speaker 1: he got he got done dirty. He got done really
Speaker 1: really really dirty.
Speaker 2: It's a it's a dirty game. But just no, man,
Speaker 2: there's always somebody watching your movements. And Citadel, I mean
Speaker 2: it's only a few companies funds that would be able
Speaker 2: to even take on that level of acquisition. They were
Speaker 2: one of them, and they struck right when the iron
Speaker 2: was hot.
Speaker 1: Now it's the diaper dot com story in many ways. Yes,