Large block trades that caused selling raises questions about cause
(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 said to be a bank involved in the sales. Shares in ViacomCBS and Discovery tumbled around 27% each onFriday, while U.S.-listed shares of China based Baidu andTencent Music plunged
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 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 of the fund's website. Tiger Asia was a Hong Kong based fund fund that sought to profit on bets on securities in Asia.
An email to clients seen by Bloomberg News said Goldman sold$6.6 billion worth of shares of Baidu Inc, TencentMusic Entertainment Group and Vipshop 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 Ltd, iQIYI Inc and GSX Techedu Inc,according to the report.
The Financial Times reported that Morgan Stanley 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.