http://ipo-edge.com/2021/03/26/excl...-record-crash-in-discovery-viacomcbs-sources/ " Shares of ViacomCBS, Discovery fell as much as 35% Friday Goldman Sachs offered very large block shares of ViacomCBS Friday afternoon – Sources Multiple prime brokers sold shares aggressively Friday afternoon Archegos typically employs high leverage on its stock positions ViacomCBS earlier this week conducted large secondary offering By John Jannarone and Jarrett Banks A liquidation of holdings at several major investment banks with ties to Tiger Cub Archegos Capital Management LLC contributed to an unseen daily decline Friday in shares of stocks including Discovery, Inc. and ViacomCBS Inc., according to people familiar with matter. Shares of media conglomerate ViacomCBS fell 26% while Discovery dropped 27% Friday, recovering from far steeper losses. The degree of the declines was unprecedented and occurred in an otherwise orderly market. Early selling came through so-called block trades from Goldman Sachs & Co., which offered over 30 million shares of ViacomCBS in midday trading. Morgan Stanley, earlier in the day, offered over 15 million shares of Discovery, according to people familiar with the matter. The common thread is defunct Tiger Asia Management LLC founder Bill Hwang, who now runs Archegos Capital. His fund was and may still be an large owner of shares in both ViacomCBS and Discovery. Mr. Hwang did not respond to phone calls, emails, or Bloomberg messages sent by IPO Edge. Mr. Hwang’s fund is known for employing leverage, meaning it borrows to invest in more securities than it could own with its own capital. One person familiar with the matter said Mr. Hwang’s fund received a margin call from one of the investment banks – not necessarily Morgan Stanley or Goldman Sachs – and was unable to meet it. As a result, that bank and others began to liquidate stocks owned by Archegos. Several other stocks swooned Friday for no apparent reason, but may be related to Mr. Hwang’s fund, which focuses on telecom, media, and technology, or TMT. Phone calls and emails to ViacomCBS, Discovery, Goldman Sachs, and Morgan Stanley were not returned late Friday evening. Contact: John Jannarone, Editor-in-Chief editor@IPO-Edge.com "
I wonder if any of that was somehow reflected in the insane bull action of the final hour of Friday's index moves north. A counter-intuitive thought, yes, but Friday was a true buggery. Starting around 11:30 AM ET or so, we went from intraday high to intraday low. Then around 2:30-3:00 PM ET, everything went gangbuster north, from low to new intraday highs. *shrugs*
I have no idea what Anchorage is and does, let along its portfolio holdings. So that article basically is saying its portfolio has some leveraged bets that soured and hence liquidation kicked in to trigger such unusual block trades, right? And Discovery and CBS are kinda victims in such liquidity imbalance and thus barring further huge blocks hitting, their sudden spiked implied vol should stabilize. I am looking to do some strangles.
That makes sense, not counterintuitive at all. When prices get pushed out of line due to pukes, they're usually the easiest high-EV trades over time.
I am shocked that this is the first time this issue is mentioned here on ET. Given all the other crap people post its bewildering this has not been mentioned earlier. While the liquidation of positions at that fund might be related it can in no way explain the massive selloff in viacom and discovery and baidu among others. I personally am on extremely high alert for Monday market open. If things heat up then buying the yen basket and shorting Russell and Nasdaq futures or buying some far otm puts might be the right game. I have been very patiently waiting for setups like this. I might of course be wrong but I will follow market breadth very closely and see...
Way too late for vol and gamma plays in those individual names.. Liquidity imbalance? There was no liquidity imbalance. It was way more, I am sure we don't know anything but the peak of the iceberg. Check out how viacom traded until 5 or 6 trading sessions ago. Like a maniac. It's a shit company with an absolutely horrific movie library and shows in relative comparison to Netflix and Disney. Nickelodeon and MTV and overpaid sports contracts? Did you check their balance sheet? They are heavily indebted and have debt to the tune of 15-20 billion come due in the next few years. Sounds like they got stuck in the 90s while Netflix built a vast empire over the past 10 years with original content. Are you aware of how much Netflix pays top comedians for a contract of 4 or 5 shows? My point is that this is one of the companies that has been trading in total bubble territory, a place it never belonged and this could just be the beginning of the blasting of the bubble for all those other companies with shit valuations, Tesla included.
Markets will see continuation unless there is some contagion. Just look at the volume and recovery in BIDU. Friday's GS drama is the only reason that I flipped short to long. No, it's not a new bull market, but that BIDU short was a crowded trade.
You mean the massive move from 180 to 200 after it was dumped from 350 levels? Massive selloffs always see initial buy volume, just as yourself. But if this does not smell like a possible broad based setup for Monday then I don't know. I am of course cautious and need more confirmation so your suspicion is duly noted. But I have not seen such a setup in quite a while. We see some of the absolutely most profitable and/or overvalued companies trading sideways or slightly down for quite a while now. Check out Amazon or Tesla among a bunch of others. It would be a game changer in financial trading if the wheels of a bubble came off company by company in piecemeal. Never seen before. At some point this bitch has to crack and it will pull down the entire market with it like the titanic. Only question is what a suitable catalyst will be. Is this it?
In 2000 the Nasdaq topped in March, the smaller tech stocks cratered first. The larger caps like Cisco, although they topped in March as well, held up pretty well until September. The S&P 500 made a double top in September 2000. After that is when the entire market cracked and went down like the Titanic. If history is a guide this latest topping processes could take another six months before the entire market goes down.
If you only take into account this one single observation then you are right. Not in the context of all past bubbles. Neither I nor anyone knows the exact timing but I have a bearish bias despite the low interest policies. I am at least prepared to take advantage should tomorrow and the next couple weeks turn out to be a harbinger for things to come.