Why ViacomCBS, Discovery, Baidu, And Other Shares Were Volatile On Friday: Reports

Gary Anglebrandt
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Rumors of massive block trades have followed gyrations in the stock prices of some companies on Friday.

A block trade involves a large number of shares and is privately negotiated between buyer and seller.

Here is the latest on what may have transpired:

  • IPO Edge reported late on Friday that "several major investment banks" with ties to Archegos Capital Management began liquidating holdings on Friday and helped push down the share prices of Discovery, Inc. and ViacomCBS Inc.

  • Goldman Sachs Group Inc (NYSE: GS) offered over 30 million shares of ViacomCBS, and Morgan Stanley (NYSE: MS) offered over 15 million shares of Discovery in block trades on Friday, IPO Edge said, citing people familiar with the matter.

  • After Archegos was unable to meet a margin call from an investment bank, that bank began selling off stakes held by Archegos, according to one unnamed source cited by IPO Edge. It is not clear which bank that may have been — IPO Edge said it wasn't necessarily Goldman or Morgan Stanley.

  • Archegos Capital Management is led by Bill Hwang. It held and may still have large holdings of ViacomCBS and Discovery, according to IPO Edge. Hwang was the founder of Tiger Asia Management LLC, which no longer is in business.

  • Shares of ViacomCBS, which trade under the name CBS Corporation Common Stock (NASDAQ: VIAC), ended Friday's trading down 27.31% at $48.23, after bottoming at $39.81.

  • DISCOVERY COMMUNICATIONS INC. (NASDAQ: DISCA) shares fell 27.45% to $41.90 after bottoming at $34.60 on Friday.

  • Bloomberg reported today that Goldman Sachs sold $10.5 billion worth of stocks through block trades that were "part of an extraordinary spree of selling that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media conglomerates."

  • Bloomberg cited people familiar with the matter, along with an email to Goldman clients that the financial news outlet saw.

  • Bloomberg said Goldman sold $6.6 billion worth of shares of Baidu Inc (NASDAQ: BIDU), Tencent Music Entertainment Group (NYSE: TME) and Vipshop Holdings Ltd (NYSE: VIPS) before U.S. markets opened. Then Goldman sold $3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd (NYSE: FTCH), IQIYI Inc (NASDAQ: IQ) and GSX Techedu Inc (NYSE: GSX).

  • Additional offerings may have come from Morgan Stanley, on behalf of one or more shareholders, with some individual trades exceeding $1 billion, Bloomberg reported.

  • Baidu shares dropped more than 16% to $174.05 during Friday's trading before recovering for a 1.97% gain at $208.61.

  • Shares of Chinese companies traded on U.S. exchanges took a general hit on Friday amid concerns of delisting as the tensions between Washington and Beijing show no sign of letting up.

  • Goldman and Morgan Stanley didn't respond to requests for comment from IPO Edge and Bloomberg.

Source image: Unsplash.com.

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