To sell a massive block of stock without crashing the price, funds use prime brokers to find buyers. This "advertisement" process, however, signals a large seller is in the market, allowing other players to short the stock and get ahead of the sale, jeopardizing the liquidation.

When a leveraged fund shows weakness, competitors actively short its public positions. This 'shooting against a fund' practice creates a downward spiral, forcing liquidation faster and benefiting the attackers. It's a common, if brutal, Wall Street tactic.

For a large fund, selling a $2B position and buying a replacement is a $4B transaction with significant market impact. This illiquidity incentivizes working with a company's board and management to solve problems rather than incurring the high cost of divesting, turning large passive investors into de facto activists.

Instead of a massive open market sale, Warren Buffett's shares will likely be metered out from his foundations over time. Berkshire could then negotiate directly with these foundations for large, off-market repurchases, providing them liquidity while managing the impact on the stock price.

To solve the critical illiquidity problem for individual investors, Goldman Sachs operates a proprietary, quarterly secondary market developed over 20 years. This platform allows its wealth clients to list and sell their alternative investment positions, transacting over a billion dollars in NAV annually and providing a crucial liquidity solution.

For many large portfolio managers, an IPO trading below its deal price is a "broken promise." This triggers automatic, price-insensitive selling, regardless of the company's fundamentals. This behavior creates a target for short sellers, who can profit by pushing a stock below its issue price and creating a selling cascade.

When a highly-levered fund is known to be in distress, the market turns predatory. Competitors will short its holdings relentlessly, not just for profit, but to force a full liquidation. The collective pressure makes the fund's collapse a near-certainty with "no other ending."

When a fund is forced to liquidate, rivals will actively short its positions. This 'shooting against a fund' strategy drives prices down faster, amplifying the distressed fund's losses and creating a self-reinforcing downward spiral in a Darwinian but common practice.

Regulations like Dodd-Frank shifted banks from being principal risk-takers to merely financing risk. During market dislocations, banks can no longer absorb selling pressure as they once did. This structural change creates a durable and profitable role for hedge funds to provide liquidity to distressed sellers.