Episode 966: Martin Shkreli： How Ken Griffin Took Over Leopord's Stock Positions (Situational Awareness LP)

**Urban Tapes** (0:00)
Can you give me a little bit more insider baseball on what it takes to unwind a big position as a shareholder? Because a lot of people who are not inside the hedge fund world are sort of maybe confused around, okay, yeah, you own $50 million of a $1 billion chip stock. Can't you just dump that on retail? Can't you just market, sell that on E-Trade or Robinhood?
In fact, it's much more complicated when you're at this level. Even though it's public markets, there's not just a big button. Can you walk us through what it actually takes to sell a big position when you're at that level?

**Martin Shkreli** (0:45)
Yeah, there's a lot that goes into it, interestingly. The first is you have this advertisement system.
If you sell into the market, you can try that and that's called selling into the screens. The screens are the numbers on your screen. Anybody could buy and sell, Robinhood, whatever. You don't normally do that if you can help it.
Selling on the screens is at least somewhat quiet. You can just trickle out. There's always this conspiracy that as I'm selling on the screens, there's some guy who can see my screen and he's like, this guy's got a VWAT market order to sell 10 million shares. That's like, I'm going to tell somebody. And that knowledge would be very, very powerful. And there's even some even crazier conspiracies out there that quants can actually use different, all kinds of insane ideas around what they can do to sort of sniff out that this is happening. So there's people that are scared of that. Then you can pick up the phone and this is the way you normally do it. And you call Goldman and you say, listen, I need to sell five million shares of Microsoft or something like that. And they say, hmm, should we take it or do we find a guy that wants to take it? And they'll sort of try to decide. Now, Microsoft is easy. If you're trying to sell share in AI, a NeoCloud in Australia that nobody wants, that's a tough one. And you own like 10 days of volume. So if you try to hit the screens, you have 10 days of volume. You'd have to be the entire volume for 10 days before you'd be out. You'd probably take the stock down 50% or more and you don't want to do that. So you try to do this advertisement process and you basically can post in the stock market that you are a seller of a stock and you can post that your four-digit what's called market maker ID and so Goldman's is GSEO. So GSEO would be a seller of say, Nebius, which was one of his positions. And so you'd call up, you'd say, okay, Goldman, I'm a client too of Goldman, what do you got on Nebius? And the guy would say, listen, we got a pretty big seller here. And say, how big?
Half a million shares and he's like a lot bigger. So you'd say, okay.
Because they have to advertise that they're working your orders. So they have to tell people that there's a seller.
They are trying to decoy about how big, but they're not going to waste somebody's time either. So the guy who's heard that there's a big seller, well, he might turn around, he's not supposed to do this. He might turn around and say, you know, there's a huge seller of Nebius out there, and I'm just a little baby fish. Maybe I could short 50,000 shares and get in front of this guy. If you're an actual interested buyer, you might also still be nervous because you'd say, well, if he's really got a ton of size, I might have to be judicious about how I step in. And so if you combine that with the sort of like pressure in the market and you add it all up, and then usually what you do is you'd have to say, oh, I know a guy that works there.
And let's see if he's returning calls. And when you hit up the guy and he's not on Bloomberg, it's hard to reach, it's kind of like, well, it sounds like it could be them selling. So it's not too many people that own that many shares of that security. So you look at the holders list and you're sort of like, who could it be selling 10 million shares? So you call Fidelity and they say, no, we're not selling. You call the next guy, no, we're not selling. Next guy's an ETF, next guy's an index fund.
You know, it's gotta be him. And so if it's them and then you start noticing all their positions are down, it gets really hard. So ultimately the bank decides because you might say, you know, I don't want to sell. The bank says, I don't care what you want.