Article: “A Gigantic Clusterf**k”: How Morgan Stanley Avoided $10BN In Archegos Losses By Selling First

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“A Gigantic Clusterf**k”: How Morgan Stanley Avoided $10BN In Archegos Losses By Selling First

TYLER DURDEN, 07 April 2021

One week ago, in our initial take on the biggest hedge fund collapse since LTCM, we explained that – in our view – the catalyst for the failure of the Archegos hedge fund, which had as much as 10x leverage allowing it to hold some $100BN in positions, was Morgan Stanley and Goldman breaking ranks with their fellow prime brokers, and sparking the biggest margin call since Lehman and AIG.

Turns out we were right. Continue reading “Article: “A Gigantic Clusterf**k”: How Morgan Stanley Avoided $10BN In Archegos Losses By Selling First”

Article: Report: SEC Opens Preliminary Investigation Into Archegos’ Bill Hwang After $30 Billion Stock Liquidation

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Report: SEC Opens Preliminary Investigation Into Archegos’ Bill Hwang After $30 Billion Stock Liquidation

Sarah Hansen, 31 March 2021

TOPLINE The Securities and Exchange Commission has opened a preliminary investigation into Sung Kook “Bill Hwang,” whose Archegos Capital Management roiled markets by defaulting on risky margin calls last week and prompted $30 billion in losses, Bloomberg reported Wednesday.

Archegos defaulted on highly leveraged margin calls last Friday, triggering a fire sale of some $30 billion in stocks including ViacomCBS, Baidu, Tencent Music Entertainment and Discovery Communications as banks rushed to unwind their positions. Credit Suisse and Nomura—two of the firm’s brokers—warned this week of “significant losses.” Goldman Sachs and Morgan Stanley were also forced to liquidate the positions they held for Archegos, but did so more quickly than other banks and as a result saw smaller losses, the Wall Street Journal reported Tuesday. Continue reading “Article: Report: SEC Opens Preliminary Investigation Into Archegos’ Bill Hwang After $30 Billion Stock Liquidation”

Article: A “Very Surprised” JPMorgan Calculates The Damage From The Archegos Collapse

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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”

Article: Goldman Sold $10.5 Billion of Stocks in Block-Trade Spree

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Goldman Sold $10.5 Billion of Stocks in Block-Trade Spree

Bei Hu, Gillian Tan and Drew Singer,  27 March 2021

(Bloomberg) — Goldman Sachs Group Inc. liquidated $10.5 billion worth of stocks in block trades on Friday, part of an extraordinary spree of selling that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media conglomerates.

The Wall Street bank sold $6.6 billion worth of shares of Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. before the market opened in the U.S, according to an email to clients seen by Bloomberg News.

That move was followed by the sale of $3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc., the email said.

More of the unregistered stock offerings were said to be managed by Morgan Stanley, according to people familiar with the matter, on behalf of one or more undisclosed shareholders. Some of the trades exceeded $1 billion in individual companies, calculations based on Bloomberg data show. Continue reading “Article: Goldman Sold $10.5 Billion of Stocks in Block-Trade Spree”

Article: No Rest For Hong Kong Investment Bankers As Kuaishou IPO Skyrockets

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No Rest For Hong Kong Investment Bankers As Kuaishou IPO Skyrockets

Brendan Ahern, 05 February 2021

Tencent-backed ByteDance rival Kuaishou Technology (1024 HK) ripped +160% in its Hong Kong IPO today in the second-best IPO performance ever behind Alibaba’s +193% gain back in 2007 (BABA went private before going public again in 2014). The company raised $5.4B from investors. Yesterday we did a deep dive on the company, which you can access here.

The value traded in Kuaishou was nearly 3X the second most traded stock worth $4.84 billion as 119 million shares traded hands today. Several brokers noted the company’s market cap of $158 billion is more than three Hong Kong banks, HSBC, Standard Chartered, and Hang Seng, combined! The Hong Kong IPO frenzy is going to continue with rumors overnight that Tencent Music Entertainment TME -4% is working on a Hong Kong IPO along with Baidu BIDU -0.3%. Bloomberg noted that ByteDance might want to take advantage of the valuation given to Kuaishou and pursue an IPO itself, similar to when Uber UBER +2% went public after seeing Lyft’s LYFT +0.2% success at doing so. Continue reading “Article: No Rest For Hong Kong Investment Bankers As Kuaishou IPO Skyrockets”