It caused a stir on Friday, when it became clear that the big banks Morgan Stanley and Goldman Sachs had sold away shares for more than 10 billion dollars each in a block sale. As a result of the aggressive sales, the media groups Discovery and Viacom ended up below 25 percent.
On Monday, it became clear that the banks Credit Suisse and Nomura also carried out large block sales last week, and announced that the results for the first quarter will be strongly negatively affected. Credit Suisse is down 11.0 percent on the New York Stock Exchange, while the Nomura share is down 13.0 percent.
The reason for the huge sale was reported to be that Archegos Capital Management did not have sufficient liquid funds to operate its highly geared positions, and was consequently forced to sell down.
The trading of the investment company must have been through a type of derivative, so that any ownership interests of more than 5 per cent are not publicly registered. Bloomberg writes, pointing out that the investment company has not necessarily owned any significant share of the underlying securities at all.
Archegos Capital Management is run by Bill Hwang, who has a background from the hedge fund Tiger Management, hence “tiger cub”. According to Dagens Næringsliv, Hwang has previously been convicted of insider trading in Chinese bank shares, and was sentenced to pay 44 million dollars after the revelation.
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