Archegos Capital’s forced liquidation contributes to the downfall of Viacom, Discovery

Part of the strong selling pressure on select US media shares and Chinese Internet ADRs on Friday was due to the forced liquidation of positions held by the multi-billion dollar family office, Archegos Capital Management, according to a source with direct knowledge of the situation.

Archegos Capital was founded by former Tiger Management stock analyst Bill Hwang.

ViacomCBS and Discovery, which made massive gains this year, underwent an unusually strong selling pressure later this week and would be at least two of the shares in question, along with Chinese internet names Baidu, Tencent, Vipshop and several others.

ViacomCBS and Discovery closed down more than 27% on Friday, with Viacom falling more than 50% over the week, while Discovery fell 45%. The companies were heavily sold amid investor skepticism about their long-term prospects in a crowded media scenario.

During the week, Baidu fell more than 18%, Tencent more than 33% and Vipshop more than 31%.

CNBC contacted Archegos Capital, but calls and e-mails were not returned. The source said that forced sales were probably related to margin calls due to highly leveraged positions.

CNBC also learned that Teng Yue Partners, an Asia-focused fund managed by another former Tiger Management analyst, Tao Li, has been negatively impacted by withdrawals in several of its major holdings. Although the fund said it fell in March, it was still positive in the year, according to the source.

CNBC also contacted Teng Yue.

– Leslie Picker from CNBC contributed to this report.