![]() Goldman Sachs (for example) could “swap” Archegos the profit or loss from $20 billion worth of Viacom stock for a $5 billion cash deposit, and 8% interest for as long as the position is open. Swaps aren’t available to the general public, because they’re usually custom arrangements between investment banks and their clients. By most accounts, Archegos got around the requirement by holding its positions via “swaps ” arrangements with investment banks that offer the fund synthetic exposure to securities without it having to take actual custody of securities that trigger the requirement to file 13-F. Archegos, despite managing more than the requisite $100 million that triggers the SEC requirement to disclose its positions quarterly in 13-F filings, has never filed the form and, presumably, never been asked to. If mysterious, opaque offshore operators filed Form 13-F, then they wouldn’t be very mysterious or opaque. They didn’t need to: a bank doesn’t warn unless it’s looking at trouble and, in all fairness, even the bank doesn’t know how much trouble we’re looking at. Warning notices from Credit Suisse and Nomura alerted investors to potentially material and significant impacts, but didn’t put a number on their total exposure. Monday’s trading brought another 168 million shares raining down on Viacom, and diminished volume across all major indexes. The early break from the Wall Street Journal, syndicated via Market Watch, included an especially suspicious anonymous assertion that, “the bulk of the selling is over.” Early stories all cited “people familiar with the ,” as sources, and explicitly spelled out that any named institutions, including Goldman, Deutsche Bank, Credit Suisse, Goldman Sachs or Archegos itself were either unavailable for comment, or declined. The opaque nature of Hwang’s offshore hedge fund and the sensational event of a forced liquidation has created a perfect storm in the chaotic information economy of financial media, to the point where it’s practically the only thing on Bloomberg. The 216 million shares that rained from the sky included sizable block trades orchestrated by Goldman Sachs on behalf of a hedge fund client who didn’t have much say in the matter.īy Sunday, the tubes were white hot with innuendo about “Tiger Cub” Bill Hwang and his Archegos Capital management winding up on the wrong end of a margin call, and Goldman liquidating its assets. (NYSE:VIAC), that just wouldn’t quit.īy Friday, the price had taken a 32% hit, and any “smart” money looking to buy the legacy business at a discount found out the hard way that it was early. The buzz started in earnest on Saturday, and was really humming by Sunday, but the story started last week with a sharp draw down in media giant VIACOMCBS INC. ![]()
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