Home Business ViacomCBS, Discovery plunge due partially to pressured liquidation of Archegos Capital positions

ViacomCBS, Discovery plunge due partially to pressured liquidation of Archegos Capital positions

The ViacomCBS brand is displayed on the Nasdaq MarketSite to have a good time the corporate’s merger, in New York, December 5, 2019.

Brendan McDermid | Reuters

A few of the extreme promoting stress in choose U.S. media shares and Chinese language web ADRs on Friday was because of the pressured liquidation of positions held by the multibillion greenback household workplace, Archegos Capital Administration, in accordance with a supply with direct data of the state of affairs.

Archegos Capital was based by the previous Tiger Administration fairness analyst, Invoice Hwang.  

Media shares ViacomCBS and Discovery, which have seen huge positive factors this 12 months, got here beneath unusually heavy promoting stress late this week and have been mentioned to be no less than two of the shares in query, together with the Chinese language web names Baidu, Tencent, Vipshop and several other others.  

ViacomCBS and Discovery closed down more than 27% on Friday, with Viacom off greater than 50% for the week whereas Discovery slid 45%. The businesses 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 pressured gross sales have been seemingly associated to margin calls as a result of closely leveraged positions.

CNBC has additionally discovered that Teng Yue Companions, an Asia-focused fund run by one other former Tiger Administration analyst, Tao Li, was negatively impacted by drawdowns in a number of of its key holdings. Although the fund was mentioned to be down in March, it was nonetheless optimistic YTD, in accordance with the supply.

CNBC has additionally reached out to Teng Yue.

— CNBC’s Leslie Picker contributed to this report.

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