By Crystal Tse and Sridhar Natarajan
(Bloomberg) — The family office of former Tiger Management
trader Bill Hwang was behind the unprecedented selling of some
U.S. stocks Friday, according to two people directly familiar
with the trades.
Archegos Capital Management was forced by its banks to sell
more than $20 billion worth of shares after some positions moved
against him, said the people, who asked not to be named because
the details aren’t public. The companies involved ranged from
Chinese technology giants to U.S. media conglomerates.
Morgan Stanley traded about $13 billion, including Farfetch
Ltd., Discovery Inc., Baidu Inc. and GSX Techedu Inc., said the
people, while Goldman Sachs Group Inc. sold $6.6 billion worth
of shares of Baidu, 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 including ViacomCBS Inc. and iQiyi Inc. the email said.
Hwang didn’t reply to an email seeking comment Sunday. A
Goldman spokesperson declined to comment and a Morgan Stanley
official didn’t immediately respond.
ViacomCBS and Discovery posted their biggest declines ever
Friday, after the selling and analyst downgrades. ViacomCBS
closed 27% lower to $48.23, down from a high of $100.34 on March
22. Discovery also slumped 27% to $41.90, down from $77.27 on
March 19.
Wall Street figures have been feverishly speculating about
the identity of Friday’s seller. The liquidation had triggered
price swings for every stock involved in the high-volume
transactions, rattling traders.
Read more: ‘Unprecedented’: Wall Street Ponders Goldman’s
Block-Trade Spree
Block trades — the sale of a large chunk of stock at a
price sometimes negotiated outside of the market — are common,
but the size of these trades and the multiple blocks hitting the
market during the normal trading hours aren’t.
Hwang was an institutional stock salesman at Hyundai
Securities Co. in the early 1990s, where he dealt with Julian
Robertson’s Tiger Management. Robertson hired him in 1995 after
Hwang won an annual prize awarded to the person outside of Tiger
who had contributed most to the fund’s success.
After Robertson closed Tiger, Hwang set up Tiger Asia
Management, in part with money seeded by his mentor Robertson.
In December 2012, Hwang admitted to illegally using inside
information to trade Chinese bank stocks and agreed to criminal
and civil settlements of more than $60 million.
–With assistance from Katherine Burton.
