Authored by Lance Roberts via RealInvestmentAdvice.com,

The AI “bear case” isn’t one argument; it’s three. Burry on earnings. Bernstein on circular financing. MIT on revenue. Two are half right. One falls apart on the data.

Michael Burry broke a two-year silence on November 11 to accuse the world’s largest technology companies of cooking their books, calling it one of the more common frauds of the modern era. That got attention, and it should. When the man who shorted the housing bubble says AI earnings are fake, you listen. But the AI bear case that has hardened over the past six months isn’t one argument. It’s three. And when you pull them apart, two hold up as real risks, and one falls apart on contact with the data.

Three Arguments, Not One

Here’s the problem with the way the AI bear case is usually discussed. The skeptics blur three separate claims into a single mood.

• The earnings are fake.
• The demand is manufactured.
• The spending will never earn a return.

Each one points to something real, but each one also gets stretched beyond what the evidence supports. Most notably, that often occurs in the same breath.

I’ve spent the better part of a year on this question. Last summer, I argued that the deficit narrative would find its cure in AI infrastructure. Then, last month, I stress-tested that thesis against Goldman’s research and conceded where my original multiplier math was too generous. So I’m not defending a permabull position here. I’m doing what my clients would want me to do: steelman the bear, then check the receipts. Let’s take the three in the order the skeptics usually make them.

The AI Bear Case On Earnings

Let’s start with Burry, because he is the sharpest. To wit:

“Understating depreciation by extending useful life of assets artificially boosts earnings.”

His math runs like this. The hyperscalers depreciate Nvidia hardware over five or six years, when the real economic life of a chip on a three-year cycle is closer to two or three. Stretch the schedule, undercount the annual expense, and the reported profit looks better than the economics justify. He pegs the gap at roughly $176 billion of understated depreciation across the industry from 2026 through 2028. By the same math, Oracle overstated near 27% and Meta near 21% by 2028.

Is he wrong? Not on the accounting. Useful-life assumptions are a genuine lever, and a two- to three-year chip cycle on a six-year schedule is a fair thing to question. If you own these names on reported earnings alone, take the point seriously.

Here’s where the argument gets stretched. Depreciation is a non-cash charge. Yes, it moves reported EPS, but it does not touch a single dollar of operating cash flow. Alphabet still generated roughly $165 billion in operating cash flow in 2025, and that number doesn’t care how the accountants schedule a server. The problem Burry describes, even if you grant every figure, is an earnings-quality and valuation issue. The bears conflate “earnings are overstated” with “the business isn’t working,” and only the first claim survives the filings.

Circular Financing And Manufactured Demand

The second argument is the circular one. Nvidia invests in OpenAI. OpenAI buys cloud from Oracle. Oracle buys chips from Nvidia. Bernstein’s Stacy Rasgon said the setup would “clearly fuel ‘circular’ concerns,” and the comparison to dot-com vendor financing, Nortel and Lucent lending customers the cash to buy their own gear, writes itself. Analysts have tagged north of $800 billion in these arrangements.

The concern is legitimate for those specific deals. The mistake is treating the loop as the whole story. UBS put the OpenAI-Nvidia arrangement at up to 13% of Nvidia’s projected 2026 revenue. The other 87% comes from customers buying at arm’s length. Most hyperscaler AI revenue comes from enterprises and consumers paying real money for cloud and software, not from the same dollars chasing themselves around a circle of five companies.

Does the circular piece deserve watching? Absolutely. OpenAI is reportedly on track to lose around $14 billion this year, and vendor-warrant deals like AMD’s are exactly the kind of engineering that looks clever right up until demand slips. But “some of the financing is circular” is a caution flag. It is not, by itself, a bubble thesis.

The AI Bear Case On Revenue

Now, the one that collapses. The headline version comes from the MIT “GenAI Divide” study: 95% of enterprise AI pilots showed no measurable profit impact despite billions spent. The bears read that as proof that the capex will never earn a return. Capex without revenue. The dot-com story all over again.

Two problems. First, read what MIT actually found. The failures were organizational, not technological. Companies were building tools in-house instead of buying them, and aiming them at marketing instead of the back office. In the same survey, roughly 90% of workers reported using personal AI tools at work, against only 40% of firms with official subscriptions.

Here is the most crucial point. The revenue is showing up. It just isn’t always running through the corporate AI budget.

Second, and this is the part that the “no revenue” crowd skips, the study measures the buyer’s return, not the seller’s revenue. Morningstar estimates that in 2025, the U.S. AI sector produced around $100 billion in services revenue. That is enough to cover the cost of running the models. The question was never whether the revenue is REAL. It’s whether that revenue eventually covers model training and research, not just the cost of inference. That’s a live question. “Nobody is paying for this” is not.

So, let’s recap where we are. Two of the three bear arguments are real risks about price and financing. The third, that the spending will never earn revenue, is the one that falls apart on the data.

Where The Bears Are Right

I like the AI trade. Mostly. What keeps nagging me isn’t the revenue. It’s the free cash flow. The four hyperscalers spent about $410 billion on capex in 2025, and 2026 guidance points to something near $700 billion. That’s real money leaving the building. Pivotal Research projects Alphabet’s free cash flow drops almost 90% this year, to roughly $8 billion from $73 billion. Amazon’s could turn negative.

But falling free cash flow isn’t automatically the red flag it looks like, and here’s where I part ways with the harder bears. There’s a difference between a company bleeding cash to prop up a dying model and one spending record sums to build the next one. Alphabet, Amazon, and Microsoft aren’t buying back stock at these levels. They’re plowing the cash back into the business.

The assumption buried inside the bear case, that the spending never earns a return and free cash flow never recovers, is itself a bet against three of the best capital allocators of the past twenty years. Amazon spent a decade being told AWS was a distraction. Microsoft was written off before Azure. “This time is different” is a dangerous phrase in both directions. The honest caveat is that the real difference this round isn’t the companies, it’s the asset: a GPU on a two-to-three-year cycle has to pay off fast, in a way those decade-long infrastructure bets never had to.

So the honest version of the AI bear case isn’t “the earnings are fake” or “no one is paying.” It’s this: spending is running years ahead of payback, and every hyperscaler is building as if the return has already been proven. It isn’t yet. What is crucial is that you can be right about the fundamentals and still pay far too much for them. Cisco had real revenue in 2000. It still fell 80% and took the better part of two decades to reclaim that high.

What The AI Bear Case Means For Investors

Separate the two risks, because they call for different responses. The revenue risk, the MIT “no ROI” story, is largely noise for a diversified investor. The valuation-and-cash-flow risk is the one to manage. Owning the AI buildout at a sensible weight is fine. Owning it as though every dollar of promised capex converts cleanly into profit is not.

That’s how we’ve positioned it. We hold AI exposure across both the Equity Aggressive Growth and Equity Conservative Growth models, but we’ve kept it trimmed to a target weight rather than letting the winners run to a concentration that would sting if the multiple compresses. When the group re-rates, and at some point it will, the gap between a 4% position and a 9% position is the gap between a drawdown you manage and one that manages you.

The bottom line is this. The AI bear case is worth taking seriously on price and financing. It is not worth taking seriously on demand. Anyone selling you the whole package as a single story, bull or bear, is selling you a mood, not an analysis.

The revenue is real. The cash flow is the thing to watch. Price accordingly.

The average American has learned about the far-left movement, or more particularly, reformist socialists, otherwise known as the Democratic Socialists of America, in recent months. The DSA says in its own words that its platform is about collapsing America from within. To accomplish that, they must push open borders and flood the nation with millions more illegal aliens, similar to what the Biden-Harris regime of globalists did, among many other nation-killing policies.

The only problem for the DSA is that, after weeks of heightened news coverage in the corporate media about its sinister plan, the news cycle has turned against it. Tens of millions, if not hundreds of millions, of people across the West have just witnessed the border invasion of 50,000 military-aged men into the Spanish enclave of Ceuta at a time when the socialist regime controlling Spain has adopted what some call “suicidal empathy” and welcomed illegals into the country by the millions on a red carpet.

Just kidding, this is the actual footage … pic.twitter.com/jYRpSWM24e

— Elon Musk (@elonmusk) July 31, 2026

In the minds of millions across the West, one political association is becoming increasingly easy to see among the average voter: mass migration from the third world is now seen as a direct consequence of electing socialist governments. Spain has become the latest case study, with the country’s socialist-led government planning to grant amnesty to at least one million illegal migrants.

We wrote earlier that President Trump and the GOP would connect the dots for American voters through a media campaign, warning that electing socialists could trigger another U.S. border invasion. The chaos in Ceuta now provides powerful imagery of what Trump argues could happen if the DSA seized more power.

Trump said Friday morning: “It’s terrible. Remember that picture. That’s going to be us in three years if the wrong side gets in… If the Democrats get in, you will not live a very good life.”

.@POTUS: “It’s terrible. Remember that picture. That’s going to be us in three years if the wrong side gets in… If the Democrats get in, you will not live a very good life.” https://t.co/gCSfGLO58i pic.twitter.com/K1F7fhYue0

— Rapid Response 47 (@RapidResponse47) July 31, 2026

Readers should remember that the DSA is a reform-socialist organization. That distinction matters because reform socialists seek to destroy and dismantle the nation and capitalism – and reconstruct the political and economic system along socialist lines.

Second, the DSA has openly promoted an agenda that would collapse border enforcement and facilitate another invasion of illegals numbering in the millions. The economic consequences of the Biden-era migration surge are already visible, particularly in housing. Dallas Fed research estimated that unauthorized immigration accounted for roughly 30% of U.S. home price growth and about 20% of rent increases between 2021 and 2024.

All in all, the Ceuta invasion is strengthening the political case for secure borders across the West – already being spoken about by right-wing EU officials today – while creating an optically devastating moment for socialist parties and the open-border left across the West.

Authored by Turner Wright via CoinTelegraph.com,

Two US senators on opposite sides of the political aisle have reportedly sent revised ethics guidelines to the White House as part of discussions over a cryptocurrency market structure bill in Congress.

According to a Thursday PunchBowl report, Senator Thom Tillis and Senator Ruben Gallego submitted a counteroffer to the Trump administration that included a change to ethics provisions in the Digital Asset Market Clarity (CLARITY) Act.

The changes would reportedly address concerns from many lawmakers in the first draft by allowing state authorities to enforce a ban on federal officials issuing or sponsoring tokens rather than the US Attorney General.

Gallego, a Democrat, previously said that provisions around ethics, consumer protection, illicit finance, conflicts of interest and market integrity “must be strengthened” and he would continue to work with Republicans to get the bill “over the finish line.”

Cointelegraph reached out to Gallego’s and Tillis’ teams for clarification on the proposed changes but did not receive an immediate response.

The proposed revisions to the crypto bill could bring in support from Senate Democrats, many of whom have publicly said they will not vote for the CLARITY Act “if it protects [US President Donald] Trump’s dominance over an industry that he will have more control to regulate.”

Republicans currently have an effective 52-47 majority in the Senate with Senator Mitch McConnell absent due to medical reasons, and will need support from Democrats to meet the 60-vote threshold for the bill to pass.

The major Russian industrial city of Volgograd, in the country’s southwest, is being engulfed in smoke and darkness on Friday after a wave of Ukrainian drone attacks scored several hits on key sites.

A sprawling energy facility, as well as warehouse belonging to the online retailer Wildberries, went up in flames, resulting in several injuries. During the attack a residential area was also struck, resulting in the death of a woman in her destroyed home.

Wildberries has since confirmed that a large fire broke out at a logistics hub in Volgograd while reporting no casualties at the site. The attack comes on the heels of more than a dozen Wildberries having been hit by long-range drones over the past couple weeks.

After some 13 warehouses have been hit, reports have estimated that about 10 percent of the company’s storage capacity has vanished. The latest attack brings the total to 14.

A statement by the online retailer giant sought to assure customers, “Logistics chains have been reorganized, and the receipt of deliveries and dispatch of orders are being carried out at other facilities.”

The Amsterdam-based Moscow Times also notes that “NASA’s fire monitoring system FIRMS showed several large active fires at the site of a major Lukoil-operated oil refinery just south of the city of Volgograd. Lukoil has not commented on the reported attack on its facility.”

This was further confirmed in Bloomberg:

Ukraine struck one of Russia’s largest oil refineries, threatening to disrupt fuel supplies again as strikes on the country’s downstream industry resumed.

Ukraine’s Security Service said on Telegram that it targeted facilities at Lukoil PJSC’s refinery in the Volgograd region, without indicating the extent of the damage. The attack resulted in a fire at the facility, Ukraine’s General Staff said in a separate message.

A large fire has reportedly engulfed parts of the complex, after which the General Staff of the Armed Forces of Ukraine boasted of the attack Facebook.

The General Staff described that “Lukoil-Volgogradneftepererabotka is one of the largest oil refineries in the Russian Federation. Its refining capacity is approximately 15 million metric tons of crude oil per year. The facility produces automotive gasoline, diesel fuel, and jet fuel. It is involved in supplying the needs of the Russian army.”

Ukrainian drones struck another Wildberries logistics hub overnight, hitting a 44,000 m² complex in Volgograd’s Dzerzhinsky district, around 500 km from the front. The strike brings the reported total to 14 Wildberries logistics centers hit over the past two weeks. #Ukraine pic.twitter.com/PMRrTMniNp

— NOELREPORTS 🇪🇺 🇺🇦 (@NOELreports) July 31, 2026

More broadly, several Russian regions faced another night of large drone waves, with the country’s defense ministry later saying that over 370 drones were intercepted overnight. Russia has also carried on with nightly ballistic missile and drone attacks on Ukraine, with attacks this week focusing as far west as Lviv, and near the border with Poland.

Having rebounded from record (46 year) lows in June, University of Michigan’s final July Sentiment survey was expected to show further improvement MoM, but a slight decline from the preliminary print as gas prices started rising again following the apparent end of the MoU-driven MidEast ceasefire.

However, from 49.5 final for June, UMich headline print rose to 54.4 preliminary and has now jumped further to 55.2 (54 exp) final – the highest since February.

Both Current Conditions and Expectations sub-indices also rose with the latter jumping most and the former down very modestly from the preliminary print.

Broad-based improvements were seen across all groups by income, education, wealth, age, and political party.

“Consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background,” Joanne Hsu, director of the survey, said in a statement.

Even Democrats are getting more enthused…

Year-ahead inflation expectations ticked down from 4.6% in June to a still-elevated 4.2% this month. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations held steady from last month at 3.3%, remaining a bit higher than the 2.8% to 3.2% range seen in 2024.

Additionally, five-year expected business conditions reached a 12-month high.

Finally, the report mentioned artificial intelligence has become a “salient” factor for consumers.

Hsu said the comments have been negative on net, though consumers cited both positive effects on productivity and negative impacts on the job market.

“We note with concern that the security situation remains precarious,” said Pakistani Foreign Ministry spokesperson Tahir Andrabi on his country’s mediation efforts to find peace between the US and Iran. Talks “are ongoing to normalize the situation, particularly the situation in the Strait of Hormuz,” he told reporters as a week full of renewed fighting as come to a close. But there essentially are no current talks, and US officials have indicated they are not even seeking them.

Early Thursday had seen the last major exchanges of tit-for-tat attacks, followed by a window of relative quiet into Friday – but the Iranian military has said it newly targeted strategic US military facilities at Kuwait’s Ahmad Al-Jaber airbase in a drone attack. This was cast as ‘retaliation’ for US attacks of the day prior which focused on Qeshm island. Several Iranian troops had been killed in the prior assault, and separately a family was slain when their home was reportedly hit.

Semiofficial Tasnim news agency said the armed forces had targeted hangars, satellite communication systems and equipment warehouses using drones – based on the military statement.

“Iranian state media reported the strike on Ahmed Al Jaber Air Base early Friday, but Kuwaiti officials and the Pentagon have yet to comment,” Newsnation summarizes, adding of the current standstill in fighting, “Notably, Iranian media did not report any American strikes hitting targets inside Iran overnight, a change from Wednesday, when the U.S. carried out what officials called a heavy wave of strikes against Iranian positions.”

The day prior saw the Iranians heavily target an American outpost in Jordan. Iran believes the US is amassing equipment there in preparation for further rounds of attacks. As for the Friday targeting of Kuwait: “Iran cited a U.S. strike that killed a mother, father and their 2-year-old child in a home on Qeshm Island as part of its justification for the reported Kuwait attack.”

On the question of where the crisis goes from here, a Tehran-based researcher at the Center for Strategic Studies, Ali Akbar Dareini, gave Al Jazeera some interesting insight into Tehran’s likely thinking:

He said Iran is likely trying to preempt any future attacks by the US in its current targeting in the region. Iran does not want to “allow the US to decide when to start the war, when to pause temporarily and when to restart the war”, he added. “Iran is now targeting the staging grounds of future operations.”

Dareini explained that while Washington has been pursuing “vertical escalation” by ramping up military attacks against Iran, Tehran has sought “horizontal escalation” by expanding the conflict’s “geographical scope”.

“Iran wants a complete, permanent end to war, or it’s going to be a wide-scale regional war,” he said.

As for the latest on potential US-Israeli plans to escalate against the Islamic Republic…

The U.S. and Israel are reportedly considering a land blockade of Iran to increase economic pressure after months of military action failed to force Tehran back to negotiations.

The proposal would involve persuading neighboring countries—such as Iraq, Pakistan, Türkiye,… pic.twitter.com/uBHO7qx9po

— Clash Report (@clashreport) July 31, 2026

In the Strait of Hormuz, Iran’s Revolutionary Guards (IRGC) has claimed its forces struck a pair of tankers attempting to pass though the narrow waterway under the “air escort” of the US military.

The IRGC asserted that the “non-compliant oil tankers… were struck and brought to a halt, while four other oil tankers quickly changed course and returned to their previous positions.” Meanwhile, two headlines that don’t line up:

• US President Trump says the Iran war is going well; US is hitting Iran hard and “we just keep winning” (Fox)
• The Persian Gulf Waterway Management Authority announces that traffic through the Strait of Hormuz is not possible due to the continued aggressive actions of the US

Still, the fact that there’s been no new overnight Pentagon attacks on Iran, and the lack of intense tit-for-tat so far on Friday, has resulted in oil rebounding significantly…

But this Friday’s somewhat ‘quiet’ state of things could likely dramatically shift at any moment, as has been the pattern this summer. The aforementioned Tehran-based analyst Dareini describes a serious change and overhaul in Iranian leaders’ strategic thinking, which has gone from defensive to proactive, with an understanding of the need to inflict pain on the US side in a preemptive way.

“Iranians are tired from suffering from limited US attacks,” Dareini said, charging that the US uses its declared pauses as a “deception tactic” merely in preparation for future attacks and operations.

“There has been a profound change in Iran’s strategic thinking,” he added. “The era of restraint is over. Iran has decided that, if needed, it has to take preemptive military action against the US.”

Via Middle East Eye

As renewed attacks between Iran and the US expand into Iraq and Yemen, the Hamshahri daily, which has close ties to the Islamic Revolutionary Guard Corps (IRGC), has dedicated its front page to a report on the force’s speedboats in the Gulf.

On Wednesday, the daily described the boats as the “winning card in the Persian Gulf” and said they are one of the main elements of Iran’s deterrence against an expansion of US attacks. “The fleet has become one of the most complex challenges facing American forces in the Persian Gulf over the past two decades by relying on the ‘swarm attack’ tactic. It has also served as Iran’s strategic tool in the Strait of Hormuz over the past five months,” Hamshahri wrote.

According to the report, Iran’s naval strategy is based on developing small, high-speed, low-cost boats in large numbers. Rather than competing directly with larger fleets, the strategy aims to increase the enemy’s costs and limit its freedom of action.

On the role of the boats in keeping the Strait of Hormuz closed, Hamshahri added: “The combination of speedboats, naval mines, cruise and ballistic missiles, and drones has completed the puzzle of Iran’s strategic encirclement of the Strait of Hormuz.“

Brigadier General Hossein Alaei, the first commander of the Islamic Revolutionary Guard Corps (IRGC) Navy and a former Iranian defence official, has joined political figures calling for an end to the war with the United States, saying Iran’s true victory lies in restoring peace and stability.

Alaei, who served as a senior IRGC commander during the Iran-Iraq War (1980–1988), commented on the conflicts launched against Iran by the United States and Israel since June 2025.

“In war, while it is true that Iran defends itself, stands firm, and strikes back at its enemy, the very existence of war is to the detriment of the Iranian people,” he said.

The former IRGC commander also criticized the collapse of the memorandum of understanding (MoU) between Iran and the United States. He described the agreement as a complete victory for Iran and a defeat for Israel. “In this agreement, we gave up virtually nothing,” Alaei said.

“The US believes it has stripped, damaged and destroyed Iran’s nuclear program. The maximum we have conceded is that we will discuss the nuclear issue in the future, while from the beginning Iran’s position was not to possess nuclear weapons.”

Iranians sing “Bella Ciao” to mock the Americans while cruising through the Strait of Hormuz, as a vessel waits in the background for permission from the IRGC to pass. pic.twitter.com/C08QEKkFWn

— The Saviour (@TheSaviour) July 26, 2026

He also said the agreement had put pressure on Israel to halt its military strikes on Lebanon. “Israel wanted to strike Lebanon every day; through this agreement, we stopped Israel’s daily attacks on Lebanon. This is a very big victory,” he said.

While hardline factions in Iran have called for an end to all negotiations with the United States and for the war to continue since military clashes resumed on July 7, some figures from the older generation of the IRGC, including Alaei, are advocating an end to the fighting.

Update (1130ET): The Wall Street Journal reports that Situational Awareness, the highflying artificial-intelligence-focused hedge-fund firm, sold the bulk of its stock portfolio to Ken Griffin’s investment firm Citadel after suffering deep losses, according to people familiar with the matter.

*  *  *

Update (1000ET): Situational Awareness has exited all of their public investments, CNBC’s David Faber reports on air, citing people familiar with the situation.

Faber reports that the liquidation was done “through one enormous trade.”

Roughly two-thirds of the assets under management at Situational Awareness were public equities, both that he owned on the long side and that he was shorting, Faber says.

That could help explain the panic bid in Nasdaq this morning, as investors may believe the overhang from this unwind is over…

…do you really think that Leopold was the only ‘smartest man in the room’ that was using TRS to massively lever into momentum?

*  *  *

In 2020/2021, one fund almost single-handedly used massive amounts of leverage to drive several big media and tech stocks dramatically higher.

That fund – Archegos – run by the now infamous Bill Hwang – used Total Return Swaps (TRS) to build massive levered positions on the back of de minimus capital (and even more notably, without everyone seeing how much he really owns because these were ‘off-balance-sheet’ swaps).

For a while, everything was awesome.

The prime brokers were earning their interest and Archegos was making bank, Hwang was a genius, as the shares rose on the back of their own virtuous buying circle.

But then, one day in March 2021, one of his big stocks (ViacomCBS) suddenly drops a lot because the company sold more shares.

The banks came knocking for some more collateral to cover the losses (which were huge due to the leverage), but Archegos didn’t have the cash (and they had been using TRS from a number of brokers – none of which knew about – creating a systemic crisis). 

The prime brokers were forced to liquidate the holdings (first one to sell wins), and the result was the escalator up in shares became an elevator down (see chart above) in a number of the names that Archegos was holding.

Since then we have had a few scares, but in general, banks have improved their risk management process (a number of risk managers were fired over Archegos).

But, the money that primes can make from the interest and the incessant momentum of the AI bubble perhaps became too much to miss out on… especially when you know other competitors are doing ‘the thing’.

All of which brings us to the last month…

About six weeks ago, we raised a big red flag that something was going on as soaring funding costs suggested the banks were offering significant leverage…

Unprecedented surge in S&P funding costs by dealers lending out futures and Total Return Swaps (remember Archegos) to institutional clients. Think of it as lending costs for long positions. pic.twitter.com/x9KQu4r9MK

— zerohedge (@zerohedge) June 15, 2026

The last few weeks have seen dramatic unwinds of a number of the highest-flying AI-related names (and the total collapse of momentum)…

Put those two things together and we smelled a TRS-Tantrum.

Overnight, we may have found the first culprit caught in this over-levered trap.

Situational Awareness, a hedge fund launched by former OpenAI employee Leopold Aschenbrenner that manages around $20 billion, is seeking new money after facing losses linked to declining AI stocks, the Financial Times reported.

Situational Awareness (SA) said in an investor letter dated July 24 outlining its half-year performance that it had “not been immune” to the market moves, including in Asia, but added that the dynamic had created opportunities for investment, the FT reported. The hedge fund was up 439% on a net basis this year through the end of June, the paper said. 

The fund engaged existing investors and lenders in discussions on raising capital, according to the FT, which cited unidentified people briefed on the matter.

“PS. At times we call out opportunities that seem like a particularly good time to add funds, if you have been waiting for one,” he said in the investor letter, seen by the FT, which was sent in recent days and offered the ability to invest new cash on August 1.

Some investors have been offered the option to purchase assets in its portfolio, the newspaper added.

The talks were described as ad-hoc by one of the people.

As Bloomberg reports, some of the fund’s largest holdings have slumped in recent weeks.

Shares of AI-focused cloud platform Nebius Group NV, in which the fund disclosed a multi-billion-dollar position in May, have dropped 48% from a peak last month, wiping around $35 billion from the company’s market value.

In March, Situational reported a large position in Sandisk Corp., which has fallen 56% in just over a month, and another in SharonAI Holdings Inc., which is down by a similar margin since mid-June.

Do those charts look familiar?

Look again at the PARA chart at the top – pumped and dumped by Archegos.

CNBC’s David Faber reported this morning that several of the firm’s prime brokers – including Bank of America, Goldman Sachs and JPMorgan Chase – have been working with the fund as it seeks to meet margin requirements or reduce positions in an orderly fashion, according to people familiar with the discussions.

The brokers have been marketing a group of the firm’s holdings on both the long and short side for sale prior to today’s start of trading, according to people familiar with the situation.

These reports have been denied by the fund.

Martin Shkreli (consider the source), confirms that SA is down 50% MTD and that Goldman is liquidating…

Rumors:
SALP down more than 50% MTD
SALP was up 200% YTD and is now down more than 30%
GSCO has liquidated some SALP positions

Source: Godel News
*want to be clear we wish SALP well and hope all of our clients and non-clients do great. just reporting what we’re hearing. https://t.co/zcmVNNCK94

— Martin Shkreli (@MartinShkreli) July 29, 2026

In around 15 days, the next set of 13Fs will drop and we will discover which dealers have the most TRS exposure on their books.

As a reminder, Bill Hwang was sentenced to 18 years in prison…