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- A frenzy of sales on Wall Street wiped out $ 35 billion from the value of shares of large companies on Friday.
- The sale appears to be in part the result of the “forced liquidation of positions” held by Archegos Capital Management, CNBC reported.
- Goldman Sachs liquidated $ 10.5 billion worth of shares in bulk deals, Bloomberg reported.
- See more stories on the Insider business page.
A frenzy of selling on Friday wiped $ 35 billion from the value of the shares of major Chinese tech companies and American media, and Wall Street speculates that it was in part due to the forced liquidation of a company’s holdings. investment.
Shares of ViacomCBS and Discovery fell 35% on Friday, while US-listed shares of Baidu, Tencent Music, Vipshop and others, listed in the United States, also plunged this week. The sale came as the U.S. market as a whole ended the week higher, with the Dow Jones closing more than 450 points, supported by optimism about the pace of coronavirus vaccinations.
The sale of Chinese Internet ADRs and US media shares was in part due to the “forced liquidation of positions” held by Archegos Capital Management, CNBC reported, citing a source familiar with the situation.
Archegos describes itself as a family investment office focused on equity investments primarily in the United States, China, Japan, Korea and Europe. Archegos is headed by Bill Hwang, the founder of the now defunct Tiger Asia Management. Hwang’s fund is “known to use leverage,” IPO Edge reported.
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 holdings this week, news site IPO Edge first reported, adding that the two investment banks have ties to Archegos. The move likely came after Archegos was unable to respond to a margin call from an investment bank, CNBC and IPO Edge reported, citing sources familiar with the matter.
Bloomberg reported on Saturday that Goldman Sachs had liquidated $ 10.5 billion worth of shares in block trades, where banks are looking to find buyers for large equity positions. The block trades 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 worth of shares in 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 conducted stock offers on behalf of one or more undisclosed shareholders, Bloomberg reported. Some of the deals exceeded $ 1 billion in individual companies, Bloomberg reported, citing its own data.
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