- A wave of sales on Wall Street erased $ 35 billion from the stock prices of large companies on Friday.
- The liquidation appears to be partly the result of the “forced liquidation of positions” held by Archegos Capital Management, CNBC reported.
- Goldman Sachs settled $ 10.5 billion in block shares, Bloomberg reported.
- See more stories on the Insider business page.
A wave of sales wiped out $ 35 billion of stock prices for major Chinese tech and media companies in the United States on Friday, and Wall Street speculates that it was partly driven by the forced liquidation of an investment firm’s holdings.
ViacomCBS and Discovery shares fell up to 35% on Friday, while shares listed in the United States of China Baidu, Tencent Music, Vipshop and others also plunged this week. The sale came when the broader US market ended the week on a high, with the Dow closing more than 450 points, driven by optimism about the pace of coronavirus vaccinations.
The sale of Internet ADRs in China and US media shares was partly due to the “forced liquidation of positions” held by Archegos Capital Management, CNBC said, citing a source familiar with the situation.
Archegos describes itself as a family investment firm with a focus on equity investments mainly in the United States, China, Japan, Korea and Europe. Archegos is run by Bill Hwang, the founder of the now defunct Tiger Asia Management. The Hwang fund is “known to employ leverage,” said IPO Edge.
The group did not immediately respond to Insider’s request for comment and its website appeared to be offline on Saturday.
Goldman Sachs and Morgan Stanley liquidated large stakes this week, the news site IPO Edge was the first to report, adding that the two investment banks have ties to Archegos. The change probably came after Archegos was unable to answer a margin call by an investment bank, CNBC and IPO Edge reported, citing sources familiar with the matter.
Bloomberg reported on Saturday that Goldman Sachs liquidated $ 10.5 billion of shares in block operations, where banks are looking to find buyers for large equity positions. The block deals included $ 6.6 billion in shares of Baidu, Tencent and Vipshop before the US market opened on Friday morning, Bloomberg reported, citing an email to customers.
Goldman then sold $ 3.9 billion in shares of media giants ViacomCBS and Discovery, as well as luxury fashion retailer Farfetch and others, according to the report.
Goldman Sachs did not immediately respond to Insider’s request for comment.
Morgan Stanley also led stock offers on behalf of an undisclosed shareholder or shareholders, Bloomberg reported. Some of the negotiations exceeded $ 1 billion in individual companies, Bloomberg said, citing its own data.