Morgan Stanley Burned by $911 Million of Losses on Archegos
Sridhar Natarajan, 16 April 2021
(Bloomberg) — Morgan Stanley became the latest bank to get swept up in the implosion of Archegos Capital Management, reporting $911 million in total losses related to the debacle.
“The current quarter includes a loss of $644 million related to a credit event for a single prime brokerage client, and $267 million of subsequent trading losses through the end of the quarter related to the same event,” Morgan Stanley said Friday in announcing first-quarter earnings.
The loss was tied to Archegos, said a person with knowledge of the matter.
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Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age
Bloomberg, 14 April 2021
(Bloomberg) — The full implications of Beijing’s rapid-fire moves against Jack Ma’s internet empire in recent days won’t be apparent for weeks, but one lesson is already clear: The glory days for China’s technology giants are over.
The country’s government imprinted its authority indelibly on the country’s technology industry in the span of a few days. In landmark announcements, it slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance, then ordered an overhaul of Ant Group Co. On Tuesday, regulators summoned 34 of the country’s largest companies from Tencent Holdings Ltd. to TikTok owner ByteDance Ltd., warning them “the red line of laws cannot be touched.” Continue reading “Article: Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age”
GameStop Slips as Skeptic Warns That Reddit Rally Will Fade
Bailey Lipschultz, 12 April 2021
(Bloomberg) — GameStop Corp.’s Reddit-fueled trading surge is likely going to fade as threats from digital game downloads sink in, according to one skeptical Wall Street analyst.
The stock slumped after Ascendiant Capital Markets analyst Edward Woo downgraded the retailer to sell from hold, saying increasing digital sales for video-game publishers is a looming risk given GameStop’s minimal market share. He warned clients in a note about the long-term prospects for the company as the market for new gaming systems matures after new launches from Microsoft Corp. and Sony Group Corp. Continue reading “Article: GameStop Slips as Skeptic Warns That Reddit Rally Will Fade”
Archegos Exposes SEC Blind Spots, Dithering on Market Oversight
Robert Schmidt and Benjamin Bainx, 10 April 2021
The U.S. Securities and Exchange Commission was supposed to be able to spot a whale like Bill Hwang by now. As the financial world knows, it didn’t. Will the agency be able to catch the next one?
The collapse of Hwang’s Archegos Capital Management represents one of the most spectacular failures of risk-management and oversight in recent memory. For the SEC, it caps a decade of foot-dragging on protections that were meant to avert, or at least minimize, just such a blowup. Continue reading “Article: Archegos Exposes SEC Blind Spots, Dithering on Market Oversight”
Top Carbon-Credit-Seller Launches Internal Probe After Selling “Worthless” Offsets To JPMorgan, Disney
Joen Coronel, 09 April 2021
Back in December, Bloomberg published a sweeping expose that raised serious questions about the ESG investing craze sweeping the world. In the piece, Bloomberg detailed how the Nature Conservancy, the world’s biggest environmental group and a prominent seller of carbon offsets, had sold “worthless” credits to JPMorgan, Disney and BlackRock as the corporations sought to finance the protection of carbon-absorbing forest land to absolve them of their sins tied to fossil fuel usage. Continue reading “Article: Top Carbon-Credit-Seller Launches Internal Probe After Selling “Worthless” Offsets To JPMorgan, Disney”
Goldman Bought $100M Of Deliveroo Shares During “Worst IPO Ever”…And Still Made Money
TYLER DURDEN, 07 April 2021
Goldman Sachs managed to avoid billions of dollars in potential losses from the implosion of highly levered hedge fund Archegos Capital Management by breaking ranks with other syndicate banks to dump large blocks of shares representing Archegos’s exposure to a coterie of tech and media names. When the dust settled, the bank told shareholders any losses would be insignificant, while Credit Suisse, the bank with perhaps the biggest exposure, said Tuesday it has booked a nearly $5 billion loss. Continue reading “Article: Goldman Bought $100M Of Deliveroo Shares During “Worst IPO Ever”…And Still Made Money”
The Nonfungible Token
Scott H. Kimpel, 06 April 2021
A recent Bloomberg article reported that average prices for nonfungible tokens, or NFTs, are down approximately 70 percent from recent highs. NFTs are the latest innovation in digital assets and encompass digital representations of unique works of art, music, or other goods and experiences stored on blockchain. Unlike other digital assets such as bitcoin, in which each bitcoin is the same as every other one (and thus “fungible”), each NFT is theoretically unique and different from every other one (and thus “nonfungible”). A wide range of NFTs have begun to enter the marketplace over the past several months. A digital work of art represented by an NFT recently sold at auction for over $69 million, and even a professional sports league has begun to issue NFTs. A fascinating debate about the social and economic utility of NFTs has emerged, but what are some of the legal issues associated with this new digital asset class? Continue reading “Article: The Nonfungible Token”
Deliveroo Debut Declared “Worst IPO In London’s History”, Sign Of Amsterdam’s Growing Dominance
TYLER DURDEN, 02 April 2021
It’s official: the Financial Times (citing an informal polling of anonymous bankers) has declared Deliveroo’s botched London offering the “worst IPO in London’s history.”
As we reported yesterday, shares of the food-delivery competitor, which is struggling to grow market share at all costs in a battle for survival with Uber Eats and “Just Eat Takeaway”, tanked in their public-markets debut, sliding 31% after pricing at the bottom of their range. Bankers immediately started complaining to reporters about being misled by Deliveroo’s bankers, who had initially bragged that the company would price at the high end of the range. The debut, marketed as a major coup for the LSE and London markets, which are struggling for European supremacy with Euronext Amsterdam, more generally, has turned into a major embarrassment for the industry. Continue reading “Article: Deliveroo Debut Declared “Worst IPO In London’s History”, Sign Of Amsterdam’s Growing Dominance”
Amazon, Stock Compensation & Equity Valuation
TYLER DURDEN, 01 April 2021
Bloomberg News recently published an article, Amazon Fights Union Drive With Fact-Free Bombast, discussing Amazon’s alleged use of misinformation to prevent employees from unionizing. In the same manner Kailash recused itself from having a “bull” or “bear” thesis on Bitcoin, we will recuse ourselves from any discussion of unions. What we would like to draw our readers’ attention to however is the method by which Amazon pays many senior executives. In the Bloomberg article it noted that the former head of Amazon’s logistics business was awarded stock compensation worth $160 million dollars. Continue reading “Article: Amazon, Stock Compensation & Equity Valuation”
Hong Kong Hit by Dozens of Trading Halts After Earnings Deadline
Bloomberg News, 01 April 2021
Trading in more than 50 Hong Kong-listed companies was suspended on Thursday, after a number of firms failed to report earnings ahead of the March 31 deadline.
GCL-Poly Energy Holdings Ltd. and China Huarong Asset Management Co. were among the firms that announced a trading halt. GCL-Poly said additional time is required to complete its audit procedures while Huarong said it will delay delivering its earnings as it seeks to complete a transaction. While it’s not uncommon for some companies in Hong Kong to have to suspend trading on April 1, the number this year compares with at least 9 last year and 25 in 2019. Continue reading “Article: Hong Kong Hit by Dozens of Trading Halts After Earnings Deadline”
A “Very Surprised” JPMorgan Calculates The Damage From The Archegos Collapse
TYLER DURDEN, 30 March 2021
Unlike the devastating London Whale debacle in 2012, which was all JPMorgan eventually drawn and quartered quite theatrically before Congress (and was a clear explanation of how banks used Fed reserves to manipulate markets, something most market participants had no idea was possible), this time JPMorgan was nowhere to be found in the aftermath of the historic margin call that destroyed hedge fund Archegos. Which is may explain why JPMorgan bank analyst Kian Abouhossein admits he is quite “puzzled” by the recent fallout from the Archegos implosion (or maybe JPM simply was not a Prime Broker of the notorious Tiger cub), which however does not prevent him from trying to calculate the capital at risk from the Archegos collapse. Continue reading “Article: A “Very Surprised” JPMorgan Calculates The Damage From The Archegos Collapse”
Why Is It Moving? Looking Into Why SeaChange International’s Stock is Trading Higher Today
Erin Clark, 29 March 2021
Hong Kong Is Set to Target First SPAC Listing by End of Year
(Bloomberg) — Hong Kong is expected to have its own blank check company listing framework ready in June for public feedback and targets allowing deals to start by the end of this year, according to people familiar with the matter.The city is looking at tighter rules for sponsors of special purpose acquisition company listings and their buy-out targets than those enforced in the U.S., said the people, who asked not to be named discussing internal deliberations. Continue reading “Article: Why Is It Moving? Looking Into Why SeaChange International’s Stock is Trading Higher Today”
Banking Stocks Credit Suisse, Nomura Reeling From Archegos Hedge Fund Fire Sale
ADELIA CELLINI LINECKER, 29 March 2021
Investment banks Nomura (NMR), Credit Suisse (CS) and possibly others are on the hook for billions of dollars in losses as Archegos Capital Management hedge fund was forced to dump more shares Monday to meet liquidity minimums. Nomura and Credit Suisse stocks plunged more than 10%.
Among the companies affected by the fire sale that started last week are ViacomCBS (VIAC) and Discovery Communications (DISCA). Their shares sank more than 25% on Friday.
Archegos has sold nearly $30 billion in shares so far to meet a margin call. A broker makes a margin call to require a client to add funds to its account if the value of it drops below a certain level. The client, in this case Archegos, has to liquidate investments to meet that requirement. Continue reading “Article: Banking Stocks Credit Suisse, Nomura Reeling From Archegos Hedge Fund Fire Sale”
How Goldman And Other Wall Street Giants Loaned Billions To Someone Who Traded Like A Meme Stock Gambler
Kevin Dowd, 29 March 2021
Imagine if Goldman Sachs GS -0.5% lent a billion dollars to RoaringKitty.
News about margin calls is once again roiling markets. Except this time, instead of industry outsiders like Robinhood and RoaringKitty, a leading GameStop bull on WallStreetBets subreddit, the drama centers on traditional giants of the financial establishment. Continue reading “Article: How Goldman And Other Wall Street Giants Loaned Billions To Someone Who Traded Like A Meme Stock Gambler”
Las Vegas Sands probes potential money-laundering breaches at Singapore’s Marina Bay Sands casino
Bloomberg, 29 March 2021
Las Vegas Sands Corp. set up a special committee to look into potential breaches of anti-money-laundering procedures at its Singapore casino, which has already been the target of probes by US officials and local police.
The committee of three independent board members is reviewing money transfers among high rollers and third parties at Marina Bay Sands, as well as any possible retaliation against whistle-blowers, according to people familiar with the matter.
US law firm Vinson & Elkins LLP has been hired to assist with the review, according to the people, who asked not to be identified because of the confidentiality involved. Las Vegas Sands declined to comment. Continue reading “Article: Las Vegas Sands probes potential money-laundering breaches at Singapore’s Marina Bay Sands casino”