Forced liquidation of Archegos Capital position contributes to Viacom and discovery plunge

Part of the harsh selling pressure on some US media stocks and Chinese internet ADRs on Friday was due to the forced liquidation of positions held by multibillion-dollar family office Archegos Capital Management, according to a source with knowledge. direct from the situation.

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

Media stocks ViacomCBS and Discovery, which have posted massive gains this year, came under unusually strong selling pressure over the weekend and are believed to be at least two of the stocks in question, along with Chinese internet names Baidu, Tencent, Vipshop and several others.

ViacomCBS and Discovery closed more than 27% on Friday, with Viacom more than 50% for the week while Discovery slipped 45%. Companies have been heavily bypassed amid investor skepticism about their long-term prospects in a crowded media landscape.

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

CNBC contacted Archegos Capital, but calls and emails were not returned. The source said the forced sales were likely related to margin calls due to heavily leveraged positions.

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

CNBC has also contacted Teng Yue.

– CNBC’s Leslie Picker contributed to this report.