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🍋 Jane Street’s Winning Run Ends

🍋 Jane Street’s Winning Run Ends

Plus: Luigi Mangione pretended to be an investor to gather intel on his target, Anthropic's revenue grew 14-fold in a single quarter, and OpenAI is losing talent ahead of its IPO.

Short Squeez
August 17, 2026

Together With

“You won’t get rich just working hard, but if you don’t work hard, you won’t get rich.” — Naval Ravikant

Good Morning! Luigi Mangione admitted he posed as an investor managing over $50 billion to pin down the location of the conference where he shot UnitedHealthcare's CEO. Joshua Kushner's Thrive Capital keeps pushing into public markets, disclosing a ~$215 million Amazon stake, and Bill Ackman is working on a VC fund for pre-IPO bets.

Insurers are eyeing space data centers as a new growth priority. Stripe and Advent's talks to buy PayPal are heating up. Anthropic's revenue jumped more than 14x in Q2 ahead of its IPO, while OpenAI's executive exodus is drawing "huge red flag" warnings ahead of its own listing.

Plus: A Gen Z hustler claims $75,000 a month from vape vending machines, and the psychology behind why due dates drive progress.

Every deal deserves the same level of front-end diligence that the big deals get. Learn more about how your firm can enhance their commercial due diligence.

SQUEEZ OF THE DAY

Jane Street’s Winning Run Ends

Jane Street has quietly become one of the biggest and most sophisticated titans on Wall Street. If there’s such a thing as printing money, Jane Street has probably come close; the notoriously secretive firm generated more than $40 billion in revenue in 2025, and reportedly has already crossed that figure for 2026.

The firm went on a ridiculous run over the past decade and hadn’t posted a single negative trading month since 2016. It’s a wild feat for a business whose entire job is taking risk in markets. But in July, the streak came to a screeching and expensive halt, and it’s all thanks to the Nostradamus of AI.

Jane Street had its worst month ever in July 2026 and reportedly posted a $15 billion loss. In an email to staff on Friday, the firm confirmed that the damage from Leopold Aschenbrenner’s Situational Awareness hedge fund contributed heavily to the losses.

Aschenbrenner is the 24-year-old former OpenAI researcher who launched the fund with no professional investing experience. Jane Street, a firm filled with some of the smartest traders and mathematicians on earth, couldn’t help itself when it saw the ridiculous returns Aschenbrenner was putting up and decided to give him ~$2.5 billion.

For a while it looked genius. As Situational's leveraged bets on the AI buildout went vertical, Jane Street's stake ballooned to nearly $10 billion. Then the margin calls hit, Aschenbrenner fire-sold the bulk of his stock portfolio to Ken Griffin's Citadel, and the stake fell back to ~$3 to $3.5 billion. Jane Street says the position is now ~flat for 2026.

The other ~$8 billion came from its own book: the AI selloff and losing China trades that hit quants broadly.

Takeaway: This may be the first and last time Jane Street hands its capital to anyone under 30. Jane Street will survive just fine, but there's something beautifully Wall Street about the smartest traders in the room rediscovering the oldest lesson in investing: when a position goes up 4x, sometimes you're supposed to sell some.

PRESENTED BY DILIGENCESQUARED

Five of the Ten Largest PE Funds Use the Same New CDD Firm

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The work runs the whole deal funnel: industry assessment, market sizing, competitive landscape, voice of customer, and live-deal diligence. DiligenceSquared’s reports land in one to two weeks, make every claim clickable back to the evidence behind it, and they do it at a fraction of what the big three charge.

Five of the ten largest PE funds in the world are already clients. Anyone who signs off on deals should know this firm exists.

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HEADLINES

Markets Rundown

Market Update

S&P 500 closed slightly lower Friday but notched its third straight weekly gain; the 10-year Treasury yield climbed to just below 4.7%.
Headline retail sales fell 0.6% in July versus expectations for a 0.1% gain.
The University of Michigan Consumer Sentiment Index fell to 51.0 in August from 55.2, well below its ~84 long-term average.

Earnings Season

July CPI eased to 3.4% and core CPI to 2.5%, with core's three-month annualized rate at 1.6%, below the Fed's 2% target.
PPI was unchanged in July, with core PPI up 0.2%, below expectations.
September rate-hike odds fell to about 30%, down from roughly 60% before last week's payrolls report.

Movers & Shakers

(+) Reddit ($RDDT) +13% after the social platform will join the S&P 500 before market open on August 18.
(+) Fox Corp. ($FOX) +6% because JPMorgan and Wells Fargo both upgraded the media company on tailwinds from the Roku deal.
(–) Broadcom ($AVGO) -6% after BofA flagged $370 billion in aggregate AI-related debt exposure across the semiconductor sector.

Prediction Markets

SpaceX has surged since their earnings call drop.
Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

CodeRabbit, an AI code review startup, raised $143 million
Obsidian Security, a startup that secures AI agents, raised $85 million
MarginEdge, a provider of restaurant management software, raised $80 million
Infinimmune, a developer of antibody therapeutics, raised $75 million
Corma, a frontier AI lab for defensive cybersecurity, raised $60 million
Inforcer, a Microsoft security and AI management platform for MSPs, raised $50 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

The Success Lie

Description:
A thought-provoking guide from Chantell Preston that challenges conventional ideas about what it means to be successful. The book explores how externally defined measures of achievement—titles, money, status, and constant productivity—can leave people feeling unfulfilled even when they appear successful. Preston encourages readers to examine the assumptions driving their ambitions, redefine success on their own terms, and build a more sustainable approach to both professional achievement and personal fulfillment.

Book Length: 272 pages
Release Date: September 15, 2026

Ideal For:
Executives, entrepreneurs, ambitious professionals, and anyone questioning whether traditional definitions of success are actually leading to a fulfilling life.

Success isn't about achieving someone else's definition of a good life, it's about creating one that is genuinely your own.

DAILY VISUAL

The Data Center Boom Is a Texas Story

Source: Apollo

PRESENTED BY COVERD

“Am I Rich?”

It’s a question people ponder but don’t typically have a tangible answer for.

Coverd gives you one.

It breaks down all of your spending, estimates your net worth, and shows how you stack up against your peers. The best part? It does this while also offering the ability to win-back past purchases by playing mini games like blackjack or Plinko. It’s like if Rocket Money, Robinhood, and your favorite gaming app had a baby.

The Coverd credit card is the first to ever offer up to 100% cash back on every purchase. Card holders can play the aforementioned in-app games using their points.

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DAILY ACUMEN

Information Cascades

A line forms outside one restaurant while the identical restaurant next door sits empty. Nothing about the food explains it. The first few people who chose it, for whatever small or arbitrary reason, created a signal the next passerby read as information, and each person joining made the signal stronger for whoever came after, until a queue existed for no reason beyond its own existence.

Markets run on the same mechanism at scale. A stock starts moving, and the movement itself becomes the reason more people buy, not new information about the business but the fact that other people were apparently buying. Nobody in the chain needs real analysis. Each person is rationally following the person in front of them.

The question worth asking inside any fast-moving consensus is whether you have independent information, or whether you are simply the next person in a line that formed for reasons nobody currently in it actually knows.

ENLIGHTENMENT

Short Squeez Picks

Do I have to help my friend get a job I know she’d be bad at?
How much forgetfulness is normal?
Why due dates motivate progress
Designing a life that requires less willpower
Savings strategies that actually work

MEME-A-PALOOZA

Memes of the Day

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