A sell-off in the stock market could be a liquidation of the hedge fund

A sell-off in the stock market could be a liquidation of the hedge fund

  • The wave of selling on Wall Street wiped out $ 35 billion in corporate equity values ​​on Friday.
  • CNBC reported that the sale was partly due to a “forced liquidation of positions” held by Archegos Capital Management.
  • Bloomberg reports that Goldman Sachs liquidated $ 10.5 billion of shares in syndicated deals.
  • See more stories on the Insider business page.

The wave of selling erased $ 35 billion in shares of major Chinese tech companies and the US media on Friday, and Wall Street expects that was partly driven by the forced liquidation of an investment firm’s holdings.

Shares of ViacomCBS and Discovery fell as much as 35% on Friday, while US stocks listed in Baidu, Tencent Music, Vipshop and others slid this week. The sale came The broader US market ended the week higher, With the Dow Jones closing above 450 points, supported by optimism about the The frequency of vaccinations against Corona virus.

The sale in ADRs on Chinese Internet and US media stocks was partly due to the “forced position liquidation” maintained by Archegos Capital Management, CNBC reported, According to a source familiar with the situation.

Archegos describes itself as a family investment office that focuses on equity investments primarily in the United States, China, Japan, Korea and Europe. Archegos is run by Bill Hwang Founder of now defunct Tiger Asia Management. Aibo Edge reports that Hwang’s fund is “well-known for its leveraged employment”.

The group did not immediately respond to Insider’s request for comment, and its website appeared to be down on Saturday.

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Goldman Sachs and Morgan Stanley mega-liquidated this week, news site IPO Edge He was the first to be informed, Adding that the two investment banks have ties to Archegos. The move is likely to come after Archegos was unable to meet a margin demand by an investment bank, CNBC and IPO Edge reported, citing sources familiar with the matter.

Bloomberg reported Saturday that Goldman Sachs $ 10.5 billion worth of stocks liquidated in big deals as banks search for buyers for big stock deals. Citing an email to clients, Bloomberg said the combined deals included $ 6.6 billion in Baidu, Tencent and Vape Shop shares before the US market opened on Friday morning.

Goldman subsequently sold $ 3.9 billion worth of shares in media giants ViacomCBS and Discovery, as well as luxury fashion boutiques Farfetch and others, according to the report.

Goldman Sachs did not immediately respond to Insider’s request for comment.

Bloomberg reports that Morgan Stanley also led the stock offerings on behalf of an undisclosed shareholder or shareholders. Bloomberg, citing its own data, has reported that some deals have exceeded $ 1 billion in individual companies.

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