![]() O’Rourke added that prime brokers typically go long the remnants of the position, and he expected most of the names involved in the block trades to be “gapping up significantly higher" in premarket trading.Ī number of banks were involved in the block sales. “They knocked the stocks down aggressively in order to get the trades done." “The prime brokers made lots of noise in marketing these blocks," O’Rourke said. Mike O’Rourke, chief market strategist at JonesTrading said he expected the trades to “largely be done." “Some of the names where big blocks were traded on Friday might see some near-term volatility as traders wonder whether the selling is complete." “These stories around fund liquidations happen from time to time," said Michael Antonelli, market strategist at Baird. The Nasdaq Composite and S&P 500 both surged over 1% on Friday despite the sharp selloffs in Viacom and other stocks. Other market participants said potential unwinds would only have a limited impact on broader markets. “When you consider how some of these companies have skyrocketed over the last few months, there will be concerns that we are over-levered." “It’s insane," said Edward Moya, senior market analyst at OANDA. Some market participants said last week’s wild moves were likely to make investors increasingly cautious. Tiger Asia was a Hong Kong-based fund fund that sought to profit on bets on securities in Asia. Archegos was founded by Bill Hwang, who founded and ran Tiger Asia, according to a page capture of the fund’s website. Ī person at Archegos who answered the phone on Saturday declined to comment. The link with Archegos was also earlier reported by IPO Edge. ![]() CNBC reported on Saturday that the selling pressure was due to liquidation of positions by family office Archegos Capital Management, citing a source with direct knowledge of the situation, and the Financial Times and Bloomberg reported the link earlier on Sunday. The block trades were linked to sales of holdings by Archegos, a source familiar with the situation said, confirming reports elsewhere. Viacom was also downgraded by Wells Fargo on Friday. Investors and analysts cited blocks of Viacom and Discovery shares being put in the market on Friday for likely exacerbating the decline in those stocks. Shares in ViacomCBS and Discovery tumbled around 27% each on Friday, while U.S.-listed shares of China-based Baidu and Tencent Music plunged during the week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday’s closing levels. A number of large block trades on Friday which investors said caused big drops in the stocks of a clutch of companies were linked to an investment fund, Archegos Capital, a source familiar with the situation said, with the moves raising worries about volatile trading in the coming days. ![]()
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