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 in blockchain operations executed Friday by Goldman Sachs Group Inc., investors also questioned the extent to which the sale was unprecedented. and if there will be more to come.
Sales lit up the chat rooms of New York merchants in Hong Kong and were part of an extraordinary party that erased $ 35 billion from the values of bellwether stocks, ranging from technology giants. Chinese to US media conglomerates.
“I’ve 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 shares in Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. worth $ 6.6 billion before opening the market in the US, according to an email to customers seen by Bloomberg News. This move was followed by the sale of $ 3.9 billion worth of shares of ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc., according to the email.
Block trades (selling a large number of shares at a price that is sometimes traded off the market) are common, but the size of these trades and the multiple blocks that go on the market during normal trading hours negotiation are not.
“That was very unusual,” said Oliver Pursche, senior vice president of Wealthspire Advisors, which manages $ 12 billion in assets. “The question now is: are they over? Is this over? Or come Monday and Tuesday, will markets be affected by another wave of blockchain operations? ”
Read more: Goldman sold $ 10.5 billion worth of shares in blocks
The transactions led to price changes for all the shares involved in high-volume transactions, caused doubts to traders and caused talk of a hedge fund or a family office being in trouble and being forced to sell. .
The situation is worrying “because we don’t have all the answers on whether it was the liquidation of a single fund or more than one fund, or whether it was a liquidation of funds to begin with and the reason behind it. said Pursche.
“It can be difficult for a manager from the point of view of positioning. Another wave of blockchain operations may force fund managers to reassess their commitment to some actions, ”he said.
“Unprecedented”
Frederik Hildner, portfolio manager at Salm-Salm & Partner GmbH in Wallhausen, Germany, described the move as “unprecedented”. He added: “The question is why did these blogging businesses take place? Does a company know something that others don’t know or were somehow forced to reduce risk?
According to people familiar with the matter, Morgan Stanley would say that more of the unregistered share offerings were managed on behalf of one or more undisclosed shareholders. Some of the businesses exceeded $ 1 billion in individual companies, according to estimates Bloomberg data show.
Read more: Block-Trade Bevy tows $ 35 billion worth in one day
Wall Street is now trying to figure out who the seller is.
Several large investment banks linked to the hedge fund Archegos Capital Management LLC liquidated the holdings, contributing to the fall in the prices of shares of ViacomCBS and Discovery, IPO Edge reported, citing people he did not identify. CNBC the forced sales reported by Archegos were probably related to margin calls in heavily leveraged positions. Archegos is controlled by former Julian Robertson protégé and Tiger Management analyst Bill Hwang.
Goldman Sachs spokeswoman Maeve DuVally declined to comment. A spokesman for Morgan Stanley declined to comment. A person who arrived at the Archegos office in New York on Friday declined to comment. An email sent to Hwang was not returned for comments.
– With the assistance of Matthew G Miller