Archegos Stocks Swing After Fresh $2 Billion of Block Trades

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(Bloomberg) — Stocks tied to the Archegos Capital Management crisis whipsawed on Tuesday after Credit Suisse Group AG was said to hit the market with block trades that totaled more than $2 billion, the latest bulk share sale as part of the fallout from the liquidation of Bill Hwang’s fund.

ViacomCBS Inc. erased an initial loss to gain as much as 2.5%, Vipshop Holdings Ltd. rose by as much as 5.2% and Farfetch Ltd. added as much as 2.1% on Tuesday after the Swiss bank unloaded shares. All three firms bounced after falling in premarket trading.

Credit Suisse slid as much as 0.6% in U.S. trading after rising earlier in Zurich, even after the bank said it will take a 4.4 billion-franc ($4.7 billion) writedown tied to the implosion of Archegos. The S&P 500 Index was little changed Tuesday morning.

Shares of companies involved in earlier block trades totaling more than $20 billion have had a rocky ride after Hwang and his private investment firm became the center of one of the biggest margin calls of all time. A basket of equally weighted shares linked to the fund has slumped about 33% since hitting a peak on March 22, according to data compiled by Bloomberg.

“The aftermath of the Archegos Capital meltdown appears to be mostly priced in,” said Edward Moya, senior market analyst at Oanda Corp. “Prime brokerages will have to deal with further regulatory reviews and greater transparency may end up being required to avoid family offices from circumventing federal security laws. The worst from the Archegos Capital blowup should be behind us.”

The cascade of trading losses has reverberated from New York to Zurich to Tokyo and beyond as banks tallied their exposure to the massive unwinding of leveraged equity bets by Archegos. Last month, giant block trades were initiated by Goldman Sachs Group Inc. and Morgan Stanley after Archegos failed to meet margin calls. That left Nomura Holdings Inc. and Credit Suisse facing potentially significant losses.

About 34 million shares in ViacomCBS were offered on Monday, 14 million shares of Vipshop and 11 million shares of Farfetch. That’s only a fraction of the size traded by banks at the end of March.

(Updates with Tuesday’s trading after the market opened.)

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