by James Gordon at The Daily Mail
Morgan Stanley sold about $5 billion of Archegos’ stocks the night before the fire sale hit rivals, according to reports.
The investment bank and financial services company had the consent of Archegos, run by former Tiger Management analyst Bill Hwang, to shop around its stock late last month, according to a report by CNBC that cited people with knowledge of the trades.
The bank offered the shares at a discount, telling the hedge funds that they were part of a margin call that could prevent the collapse of an unnamed client.
Morgan Stanley sold roughly $5 billion in shares from Archegos late on Thursday March 25 before news of the doomed private investment firm was made public
Morgan Stanley has so far declined to comment on the trade which saw it quietly unload some of its risky positions to hedge funds.
In total, Morgan Stanley, who was was the biggest holder of the top 10 stocks traded by Archegos at the end of 2020 with about $18 billion in positions, sold about $5 billion in Archegos stock in order to avoid suffering losses of their own which could well have totaled more than $10 billion.
Morgan Stanley didn’t share the information it had with stock buyers. The Archegos shares it was selling comprised of various names including Baidu and Tencent Music.
The sell off was the start of tens of billions of dollars in sales by Morgan Stanley and other investment banks starting the very next day…
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