Billions of dollars worth of shares in Chinese tech giants Baidu and Tencent were unloaded on Friday sparked by, it’s claimed, the liquidation of positions by Archegos Capital Management.
CNBC reported that the source of the selling pressure was investment firm Archegos – founded by Bill Hwang, who also founded and ran Tiger Asia, a Hong Kong-based fund that sought to profit on bets on securities in Asia.
Shares in ViacomCBS and Discovery tumbled around 27% each on Friday, while US-listed shares of China-based Baidu and Tencent Music plunged during the week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday's closing levels.
Investors and analysts pointed to “massive” blocks of shares in both Viacom and Discovery being put in the market on Friday exacerbating the declines. Viacom was also downgraded by Wells Fargo on Friday.
A source said on Saturday that Goldman Sachs Group Inc was involved in the large block trades. Bloomberg and the Financial Times both reported that Goldman liquidated more than $10 billion of stocks in the block trades.
An email to clients seen by Bloomberg News said Goldman sold $6.6 billion worth of shares of Baidu Inc, Tencent Music Entertainment Group and Vipshop Holdings Ltd, before the US market opened on Friday.
Following this, Goldman sold $3.9 billion worth of shares in ViacomCBS 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.
- Reporting by Reuters