Situational Awareness sold most of its $16 billion public-equity portfolio to Citadel following a 67% loss in July.
Situational Awareness lost 67% of its value in July, prompting the fund to sell most of its $16 billion public-equity portfolio to Citadel. The fund faced significant losses on concentrated AI holdings, specifically CoreWeave, Inc. and Sandisk Corporation, which were caught between falling prices and evaporating liquidity. While Sandisk Corporation showed strong fiscal revenue growth, its shares fell 54% in July after an extraordinary 12-month run. CoreWeave, Inc. reported a $740 million net loss and high financing costs, making it a riskier investment than Sandisk Corporation. The fund removed leverage to avoid permanent capital impairment. The collapse demonstrates that a long-duration thesis cannot save a leveraged portfolio from a short-duration margin call. Investors are advised to wait for Sandisk Corporation's August 5 results to reset expectations, while CoreWeave, Inc. remains a riskier stock requiring durable operating profit to justify its growth.