Photographer: Michael Nagle / Bloomberg
Photographer: Michael Nagle / Bloomberg
As Wall Street speculated about the identity of the mysterious seller behind the massive $ 10.5 billion transaction executed Friday by Goldman Sachs Group Inc., investors also wondered how unprecedented the sale was – and whether more There are many.
The sales lit up the chat rooms of traders from New York to Hong Kong and were part of an extraordinary fantasy that erased $ 35 billion from the values of bell stocks, from Chinese technology giants to US media conglomerates.
“I have never seen anything of this magnitude 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 to Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. before opening in the US, according to an email to customers seen by Bloomberg News. This move was followed by the sale of $ 3.9 billion in shares to ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc., it was said in the email.
Block transactions – the sale of a large piece of stock at a negotiated price sometimes outside the market – are common, but the size of these transactions and the multiple blocks that reach the market during normal trading hours are not.
“This has been extremely unusual,” said Oliver Pursche, senior vice president at Wealthspire. councilors, which manages $ 12 billion in assets. “The question now is, Are they finished? Is this over? Or come Monday and Tuesday, will the markets be affected by another wave of block trades? ”
Read more: Goldman Sells $ 10.5 Billion in Block-Trade Spree
The transactions triggered price fluctuations for each share involved in high-volume transactions, which shook traders and led to talk that a hedge fund or a family office is in trouble and is forced to sell.
The situation is worrying “because we do not have all the answers if it was the liquidation of a single fund or more than one fund, or if it was a liquidation of the fund for the beginning and the reason behind it,” said Pursche.
“It can be difficult for a manager in terms of positioning. Another wave of block transactions may force fund managers to reevaluate their commitment to some stocks, ”he said.
“Unprecedented”
Frederik Hildner, portfolio manager at Salm-Salm & Partner GmbH in Wallhausen, Germany, called the move “unprecedented.” He added: “The question is why did these bulk transactions take place? Does a company know something that others do not know or have been somehow forced to reduce the risk?
According to those familiar with the matter, several of the unregistered share offers were administered by Morgan Stanley on behalf of one or more undisclosed shareholders. Some of the transactions exceeded $ 1 billion in individual companies, calculations based on Date Bloomberg show.
Read more: Block-Trade Bevy Deletes $ 35 Billion in Stock Values in a Day
Wall Street is now trying to find out who the seller is.
Several major investment banks linked to hedge funds Archegos Capital Management LLC have liquidated their holdings, contributing to lower share prices ViacomCBS and Discovery, IPO Edge he reported, citing people he did not identify. CNBC The forced sales reported by Archegos were probably related to margin calls on heavily leveraged positions. Archegos is controlled by former protégé Julian Robertson and Tiger Management analyst Bill Hwang.
Maeve DuVally, a spokeswoman for Goldman Sachs, declined to comment. A Morgan Stanley spokesman declined to comment. A person contacted on Friday at the Archegos office in New York refused to comment. An email sent to Hwang seeking comment has not been returned.
– With the assistance of Matthew G Miller