Photographer: Michael Nagle / Bloomberg
Photographer: Michael Nagle / Bloomberg
As Wall Street speculated on the identity of the secret seller behind the real $ 10.5 billion in block trades executed Friday by Goldman Sachs Group Inc., investors were too wondering just how invisible the sale was – and whether there is more to come.
The sales lit up the chat rooms of traders from New York to Hong Kong and were part of a spectacular spree that cut $ 35 billion in bellwether stock values ranging from Chinese tech giants to U.S. media conventions. .
“I have never seen anything of this size in my 25-year career,” said Michel Keusch, portfolio manager at Bellevue Asset Management AG in Switzerland.
Goldman sold $ 6.6 billion worth of shares in Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. before the U.S. market opened up, according to an email to rumors seen by Bloomberg News. That move was followed by a $ 3.9 billion sale of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc., the email said.
Block trading – the sale of large volumes of stock at a price that is sometimes negotiated outside the market – is common, but the size of these trades and the multiple blocks do not affect the market during the year. -conventional trading hours.
“This was very unusual,” said Oliver Pursche, vice president of Wealthspire Councilors, which manages $ 12 billion in assets. “The question now is: Are they made? Is this over? Or come Monday and Tuesday, are markets going to be hit by another wave of block trades? ”
Read More: Goldman sold $ 10.5 billion of stocks in Spree Block-Trade
The trades encouraged price movements for all stocks involved in the big deals, shattering traders and encouraging talk that hedge funds or a family office were in trouble and had to sell.
The situation is worrying “because not all of our answers are whether this was just one or more assets, or whether it was an initial liquidation and the reason behind it,” Pursche said.
“Location can be difficult for a manager. Another wave of block trades could force asset managers to reassess their commitment to some stocks, ”he said.
‘Unmatched’
Frederik Hildner, package manager at Salm-Salm & Partner GmbH in Wallhausen, Germany, said the move was “unparalleled. ”He said,“ The question is why did these trading practices happen? Does one company know something that others do not or have they been forced to cut a risk?
More of the unregistered stock offerings were said to have been controlled by Morgan Stanley, according to people familiar with the case, on behalf of one or more undisclosed shareholders. Some trades exceeded $ 1 billion in individual companies, a calculation based on Bloomberg data display.
Read More: Bevy Block-Trade Wipes $ 35 billion in stock values in a day
Wall Street is now trying to figure out who the seller is.
Several major investment banks with links to hedge funds Archegos Capital Management LLC, contributing to the fall in share prices of ViacomCBS and Discovery, IPO Edge statement, naming persons he did not identify. CNBC emergency sales by Archegos may have been related to marginal calls on high-pressure positions. Archegos is controlled by former protege Julian Robertson and Tiger Management analyst Bill Hwang.
Goldman Sachs spokeswoman Maeve DuVally declined to comment. A spokesman from Morgan Stanley declined to comment. Someone who arrived at the Archegos office in New York on Friday declined to comment. An email sent to Hwang seeking comment was not returned.
– Supported by Matthew G Miller