BullRush

Bloomberg’s breakdown of Thursday’s rout: $3.7T wiped out in one session. It was the Nasdaq 100’s worst drop since March 2020. How it unfolded: Retail sold first. Only two days in March 2020 saw more net selling (Vanda). Hedge funds and long-only managers followed, with no buyers on the other side. Then the machines: – options dealers were selling ~$7B per 1% drop; – vol-control funds had ~$61B to sell; – leveraged ETFs ~$47B; – CTAs ~$13B. Optical ($LITE $COHR $CIEN $AAOI), memory ($MU), data-center and AI-semis baskets fell 12-15% on the day, 5-6 standard-deviation moves. The S&P ex-AI fell 2.3%. For about a dozen AI baskets, it was the worst day since ChatGPT launched. Goldman’s memory basket went from +1,202% at its June 22 peak to +540%, a 51% drawdown. April 2025’s -44% took 14 months to recover. This one is 136 days in, with no dip-buying yet. The VIX went from 16.6 to nearly 28. Since 1990, only two spikes started calmer and went further: Feb 5, 2018 and Dec 18, 2024. Since 1980, the S&P has fallen 2%+ the day after a 1.5% gain only 48 times, almost all in bear markets or crises. $SOXX $QQQ

Walleye Capital, a $17B+ hedge fund, lost 5.9% in October, its worst month since March 2020, and is down 6.8% YTD. The fallout: the head of equities is out, along with a large part of his teams, and some capital goes back to investors. The fund keeps volatility, quant and its external managers, and drops the classic equity long/short pod model. Sounds a lot like the "entire division of a fund" Shkreli mentioned earlier today. From what I'm seeing, Walleye isn't alone: several other pods reportedly closed today. teapaw.org/nishantkumar07/status/… $QQQ

Bloomberg confirms what was brewing: the hedge fund purge isn't stopping at equities, "at least two more credit trading pods" have just been shut down. The multi-strat giant ($95B AUM) continues to double down on cuts across its debt teams, with the portfolio managers out: - Abacove Capital: Dominick Maggio & Amit Agrawal ("who ran Abacove Capital within Millennium") are leaving. - Twin Lights: Mark Meenan & David Ulrich ("another internal trading pod of Millennium") are gone as well. These closures build on recent cuts: Millennium pulling capital from Axebrook Capital ("credit-focused hedge fund") and the departure of senior credit trader Manav Gupta ("Credit Trader Who Had Moved His Hedge Fund to Millennium Leaves") just 6 months after moving his fund. Over at Brevan Howard, "at least five portfolio managers focused on credit trading" have also departed. The catalyst? European junk debt spreads spiking to 2009 highs , caught in a vise between "concerns about the financing of the AI buildout", sticky high rates, and geopolitical shocks. First it was the brutal de-grossing on tech L/S equities, and now credit is taking the hit.

You've been bleeding in the markets these past few weeks, don't worry: the "smart money" is too. In October, more than half of the 46 hedge funds tracked by Bloomberg finished in the red. Arini lost 12.1%, Kirkoswald 6.4%, Walleye 5.9%, Marshall Wace 5.4%, Balyasny 3.4%, and even Millennium dropped 2.3%. After yesterday's session, $QQQ is only up about 5% YTD, and $SPY around 8.5%. $NVDA has even turned red for 2026. Entire teams of PMs, multi-million dollar risk models, and even they're taking a beating. 2026 is a very tough year, for everyone.

$NBIS earnings

On QuantumScape’s go-to-market slide, Megmeet appears in the third step, “Rack Integration,” alongside Delta, Lite-On and Flex. To understand the role it could play for $QS, you have to look at what a “power system ODM” actually does. In an AI data center, the compute racks full of GPUs are fed by an adjacent rack, the power rack. That’s where power gets converted, and that’s where the backup batteries and supercapacitors sit. These racks aren’t built by NVIDIA or the hyperscalers, but by power electronics specialists like Megmeet. So QS doesn’t sell directly to data centers: according to Shahar Noy, who leads the data center division, QS ships its batteries to the ODMs, which integrate them into their systems. This approach was already in the Q2 shareholder letter, which described QSDC as working with ODMs to design solutions based on QSE-5. The division is led by Shahar Noy, who previously worked at Broadcom, Micron, Marvell and MediaTek. Megmeet is well placed in this chain. The company is part of the NVIDIA MGX ecosystem, and back at GTC 2025 it unveiled a 570 kW 800V HVDC power rack designed for NVIDIA. It also adapted its EV charging modules into data center power supplies, a path similar to QS, which is bringing its automotive cell to AI racks. Its 800V sidecar already combines power, battery and supercapacitor shelves: the slot the PowerBlock targets already exists at Megmeet. The relationship with NVIDIA is on display this week. At the OCP Global Summit, Megmeet is a Diamond sponsor, and its Monday, October 12 presentation on its 800VDC platform features two of its engineers alongside Jared Huntington, Senior Power Architect at NVIDIA. That’s the booth, C19, where QS chose to display the PowerBlock. The order of steps still matters, though. At TD Cowen, Shahar explained that ODMs only integrate a new battery once it has been approved by the “spec drivers,” NVIDIA and Google first among them. Megmeet alone can’t get QS into the racks. But once that green light comes, Shahar describes a fast integration, measured in weeks or months. My take: Megmeet can play two roles for QS. In the short term, it’s a showcase and direct access to NVIDIA’s teams. In the longer term, it’s an integrator able to put QS cells into a complete power rack. The caveat is that Megmeet also sells its own backup batteries, and its OCP communication doesn’t mention QS. The partnership still needs to be clarified. Megmeet is a Chinese company, but that shouldn’t raise an intellectual property issue: Megmeet would receive finished cells to integrate into its shelves, with no access to the manufacturing of the ceramic separator, which remains the core of QS’s technology. On volume, QS highlights PowerCo’s capacity to data center customers, and the license provides for 5 GWh per year for customers outside the Volkswagen Group.