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Large block trades that caused selling raises questions about cause

Stock MarketsMar 28, 2021 06:45AM ET
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© Reuters. FILE PHOTO: The Goldman Sachs company logo is seen in the company's space on the floor of the NYSE in New York

(Reuters) - A number of large block trades on Friday which investors said caused big drops in the stocks of a clutch of companies has raised speculation about what was behind them, with Goldman Sachs (NYSE:GS) said to be a bank involved in the sales. Shares in ViacomCBS (NASDAQ:VIAC) and Discovery (NASDAQ:DISCA) tumbled around 27% each onFriday, while U.S.-listed shares of China based Baidu andTencent Music plunged during the week, dropping as much as 33.5%and 48.5%, respectively, from Tuesday's closing levels.

Investors and analysts on Friday cited large blocks ofshares in both Viacom and Discovery companies as being put inthe market on Friday, calling them massive volumes, likelyexacerbating the declines. Viacom also on Friday was downgradedby Wells Fargo (NYSE:WFC).

A source familiar with the matter said on Saturday thatGoldman Sachs Group Inc was involved in the large blocktrades.

Bloomberg and the Financial Times on Saturday reported thatGoldman liquidated more than $10 billion of stocks in the blocktrades.

The Financial Times reported that Goldman toldcounterparties that the sales were prompted by a "forceddeleveraging", citing people with knowledge of the matter.

CNBC reported https://www.cnbc.com/2021/03/27/archegos-capital-forced-position-liquidation-contributes-to-viacom-discovery-plunge.html that the selling pressure was due to liqudation of positions by family office Archegos Capital Management, citing a source with direct knowledge of the situation.

A person at Archegos who answered the phone declined to comment. Archegos was founded by Bill Hwang, who founded and ran Tiger Asia according to a page capture https://web.archive.org/web/20210124211426/https://www.archegoscapital.com/management of the fund's website. Tiger Asia was a Hong Kong based fund fund https://www.reuters.com/article/togerasia-hedgefund/update-1-hedge-fund-tiger-asia-to-return-investor-money-idUKL4E8JE2XP20120814 that sought to profit on bets on securities in Asia.

An email to clients seen by Bloomberg News https://bloom.bg/3lYOrZm said Goldman sold$6.6 billion worth of shares of Baidu Inc (NASDAQ:BIDU), TencentMusic Entertainment Group and Vipshop (NYSE:VIPS) Holdings Ltd, before the U.S. market opened on Friday, the Bloombergreport on Saturday said.

Following this, Goldman sold $3.9 billion worth of shares inViacomCBS Inc, Discovery Inc, Farfetch (NYSE:FTCH) Ltd, iQIYI Inc and GSX Techedu (NYSE:GSX) Inc,according to the report.

The Financial Times reported that Morgan Stanley (NYSE:MS) sold $4billion worth of shares earlier in the day, followed by another$4 billion in the afternoon.

Morgan Stanley and Goldman Sachs declined to comment.

Large block trades that caused selling raises questions about cause
 

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Comments (34)
Diddl One
Diddl One Mar 28, 2021 3:13PM ET
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lots of valid and less valid points. Ceck what the big boys do. Gates disinvestment of Tec. Buffet selling Apple and so on. Maybe they know a thing or two ablut making money? Just a guess. :-)
AmericaIsKing oftheGalaxy
AmericaIsKing oftheGalaxy Mar 28, 2021 3:13PM ET
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Theres a difference knowing what youre doing and leaving people ss bag holders of good companies they shouldnt retriet from. What they are doing is telling people it doesnt matter if you invest in good companies we will tank the stock using your 402k money anyway. They are simply proving the stock martket is manipulated as the big players coorinate it.
Vin Vest
Vin Vest Mar 28, 2021 3:13PM ET
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AmericaIsKing oftheGalaxy  How is block selling "manipulation". The market is filled with buyers and sellers. Liquidation is selling. It would be manipulation if buying is riskless, but the central precept in owning stocks is RISK PREMIA.
Dave Jones
Dave Jones Mar 28, 2021 2:13PM ET
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Archegos Capital Management sold, massive margin call they couldn't cover. website is offline. Archegos is run by Bill Hwang the founder of the now defunct Tiger Asia Management. Hwang's fund is "known for employing leverage," Why Viacom went down 27%!!!
Victor Ng
Victor Ng Mar 28, 2021 2:13PM ET
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The big banks and wall street had their investment in these fake news corporation. You guys just dont realize that this is their time to cash out
Daniel Lu
Daniel Lu Mar 28, 2021 1:53PM ET
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A beautiful show of short squeeze would be the answer
Vin Vest
Vin Vest Mar 28, 2021 1:53PM ET
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{{YAWN}} I bet you just came from WSB. Retailers can't compete with the big boys; stop perpetuating the lie.
Trend Follower
Trend Follower Mar 28, 2021 9:35AM ET
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Too many ands, ifs, and buts and some almost conspiracy theories, is it possible that somebody just needed some cash for some reason and coincidences are being matched up with ideas as facts?  I mean asteroid that hit earth millions of years ago was not dropped by Aliens or was it? I might sound foolish, but all these assumptions sound just as foolish too.
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Tyler Phillis
Tyler Phillis Mar 28, 2021 9:35AM ET
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Tyler Phillis All in a good days work...aye, Goldman Sachs? LOL!
Tyler Phillis
Tyler Phillis Mar 28, 2021 9:35AM ET
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Tyler Phillis My guess as to GS’s take on this was in the $450M range.
Tyler Phillis
Tyler Phillis Mar 28, 2021 9:35AM ET
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Tyler Phillis on VIAC alone, that is. This is how the markets work and what they are for. The pajama crowd - you, dear reader - need to know the market for what it is, not what you want it to be. The incredulous reaction by the normal retail investor crowd (think pajama) proves that 20 years of “free” investment “education” only produces crybabies, not traders or investors.
Tyler Phillis
Tyler Phillis Mar 28, 2021 9:35AM ET
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Tyler Phillis You get what you pay for, nothing more. This is investment philosophy lesson #24, in a nutshell. And it’s free, to boot!
Dave Jones
Dave Jones Mar 28, 2021 9:35AM ET
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Archegos Capital Management sold, massive margin call they couldn't cover. website is offline. Archegos is run by Bill Hwang the founder of the now defunct Tiger Asia Management. Hwang's fund is "known for employing leverage," Why Viacom went down 27%! Tthis is huge news!
Stratus Angelacus
Stratus Angelacus Mar 28, 2021 9:14AM ET
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Is this the thunder before the storm ? This week should tell something of interest.
Guangyao Zhang
Guangyao Zhang Mar 28, 2021 9:05AM ET
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Funny thing is US stock firms short US tech Nasdaq. Yeah, Gov is keep printing , now momey is getting worthless, if stock market crashed, US will get troubles. Against CN firms? No, they try to reserve bullish of Nasdaq tech. Red open today, we are all dead. Hope green open tonight.
Not Important
Not Important Mar 28, 2021 8:38AM ET
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Did they short Gamestop?
yan yan
yan yan Mar 28, 2021 8:05AM ET
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not the first time Bill Hwang, korean american evangelical christian manager blew up his account, was banned from HK exhange years ago, sounds like a con man. More remarkable is the fact that BIDU practically ended in the green, thx for the dip Bill
Connecticut Yankee
A_Jaundiced_Eye Mar 28, 2021 7:45AM ET
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The New York Times has a front-page article Saturday on Joe Biden's plan to raise taxes on everyone. (Oh, I'm sorry, it's never on everyone - always on "just on the rich.") The banks' selling the day before is just a "coincidence" I'm sure. Look out below starting tomorrow !
Benjamin USA
Benjamin USA Mar 28, 2021 7:45AM ET
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Lies wow.
ChompChomp Boom
ChompChomp Boom Mar 28, 2021 7:45AM ET
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Benjamin USA hows this a lie? it is on the front page of the Sunday NY times. Here us a qoute from the article: Mr. Biden has stressed his broad-brush desire to increase the tax burden on wealthy Americans who largely earn their money through inheritance or investment, to fund spending programs meant to help people who earn their money primarily through wages.
 
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