The ViacomCBS brand is displayed on the Nasdaq MarketSite to have fun the corporate’s merger, in New York, December 5, 2019.
Brendan McDermid | Reuters
Some of the extreme promoting strain in choose U.S. media shares and Chinese web ADRs on Friday was due to the forced liquidation of positions held by the multibillion greenback household workplace, Archegos Capital Management, in accordance to a supply with direct information of the scenario.
Archegos Capital was based by the previous Tiger Management fairness analyst, Bill Hwang.
Media shares ViacomCBS and Discovery, which have seen large positive factors this yr, got here below unusually heavy promoting strain late this week and had been mentioned to be at the very least two of the shares in query, together with the Chinese web names Baidu, Tencent, Vipshop and a number of other others.
IPO Edge first reported the information.
ViacomCBS and Discovery closed down more than 27% on Friday, with Viacom off greater than 50% for the week whereas Discovery slid 45%. The firms have been closely shorted amid investor skepticism about their long-term prospects in a crowded media panorama.
For the week, Baidu was down greater than 18%, Tencent greater than 33% and Vipshop greater than 31%.
CNBC reached out to Archegos Capital, however calls and emails weren’t returned. The supply mentioned the forced gross sales had been probably associated to margin calls due to closely leveraged positions.
CNBC has additionally discovered that Teng Yue Partners, an Asia-focused fund run by one other former Tiger Management analyst, Tao Li, was negatively impacted by drawdowns in a number of of its key holdings. Though the fund was mentioned to be down in March, it was nonetheless optimistic YTD, in accordance to the supply.
CNBC has additionally reached out to Teng Yue.
— CNBC’s Leslie Picker contributed to this report.
