Hedge Funds Score $53B Jackpot 🤯

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In the rarefied world of hedge funds, a coterie of high-stakes gamblers have hit the jackpot, reaping a windfall of biblical proportions from their wager on the $53 billion takeover of Hess Corporation by Chevron. One can almost hear the champagne corks popping in the rarefied atmosphere of their Manhattan penthouses 🥂.

It appears that the denizens of these rarefied financial circles, specializing in the arcane art of merger arbitrage, have been rewarded with a bonanza of, quite literally, billions of dollars. The 20-month court arbitration, a veritable eternity in the fast-paced world of high finance, has finally come to a close, and the spoils are being divvied up with all the decorum of a Victorian-era gentlemen’s club, minus the decorum and the gentlemen 🙃.

For the uninitiated, merger arbitrage is a beguilingly simple yet fiendishly complex strategy that involves placing bets on the outcome of corporate mergers and acquisitions, typically by taking long and/or short positions in the stocks of the companies involved. It’s a bit like playing roulette, but with more spreadsheets and fewer intoxicated aristocrats 🤑.

According to the number-crunching wizards at Morgan Stanley, Hess shares were the most widely held position for merger arbitrages in the US, with a staggering $10 billion worth of positions. One can only assume that the good people at Morgan Stanley were not entirely surprised by this development, given their predilection for calculating things 📊.

The usual suspects were among those who placed their bets on the acquisition, including Ken Griffin’s Citadel Advisors, Adage Capital, and HBK Investments. One can’t help but wonder if they were all sipping champagne and congratulating each other on their perspicacity at some exclusive soiree 🎉.

Roy Behren, co-chief investment officer at Westchester Capital, was kind enough to share his thoughts on the matter, saying, “I’ve been waiting forever for this to happen. It took a year and a half, but I think the right outcome was achieved… The Hess stake was the largest position we have had in the past 15 years.” One can almost hear the sigh of relief, the quiet satisfaction of a job well done, and the faint clinking of ice in a glass of fine scotch 🥃.

As it turns out, Citadel and HBK each had the equivalent of $1 billion in shares, a fact that will no doubt be duly noted in the annals of financial history, right alongside other notable feats of fiscal derring-do 📚.

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2025-07-20 22:11