![]() Nomura, a prime broker for Archegos, on Monday warned of a "significant loss" estimated at $2 billion from the unwind of the trades.Ĭredit Suisse said the loss resulting from this exit could be "highly significant and material" to its first-quarter results. Brokerages usually sell the securities in block trades, often at a discount to the current share price, in an attempt to recover losses. In a margin call, brokerages demand that an investor deposit additional money or securities into the account when a position falls sharply in value. It triggered a domino effect where prime brokers rushed to exit the positions on Archegos' behalf and resulted in a massive margin call. These bets started to go south after ViacomCBS' $3 billion stock offering through Morgan Stanley and JPMorgan earlier in last week fell apart. JPMorgan said it expects full disclosure from Credit Suisse by the end of the week. Some of the positions were held via total return swaps, a type of derivative that allows investors to take big, levered stakes without disclosing those positions publicly. Banks could face up to 10 billion in losses stemming from the liquidation of Archegos, according to JPMorgan. media stocks ViacomCBS and Discovery, as well as a few Chinese internet ADRs including Baidu, Tencent and Vipshop. Short selling is a strategy in which an investor sells borrowed shares with the intention of buying them back in the future at a lower price.Īfter the settlement, Hwang closed Tiger Asia Management and Archegos was born.Īrchegos is a Greek biblical word for leader or prince.Īrchegos held large and leveraged bets in U.S. The agency alleged that he used confidential information received in private placement offerings to short sell three Chinese bank stocks. In 2012, Hwang pleaded guilty to insider trading of Chinese bank stocks and agreed to pay $44 million to settle charges from the Securities and Exchange Commission. Credit Suisse and Nomura are now facing huge losses. Hwang started out as a stock salesman at Hyundai Securities in the early 1990s.īefore Archegos, Hwang built New York-based hedge fund Tiger Asia Management which focused on Asian investments. Archegos Capital, a little-known New York hedge fund, triggered a huge sell-off on Wall Street after failing to meet a margin call. He was a protege and one of the so-called tiger cubs of legendary hedge fund manager Julian Robertson who mentored and supported some of the best-performing investors including Stephen Mandel, Lee Ainslie and Chase Coleman. The Wall Street Journal Video Losses at Archegos Capital Management have triggered the liquidation of positions approaching 30 billion in value, The Wall Street Journal has reported, and sent. Personal Loans for 670 Credit Score or LowerĪrchegos Capital Management is a family investment vehicle founded by former Tiger Management analyst Bill Hwang in 2013. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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