The numbers are out: Big banks abandoned 100 million shares of major Bill Hwang stocks in the first quarter




The big banks that helped Bill Hwang’s Archegos Capital propel several stocks to new heights earlier this year threw in around $ 100 millionof these shares during the liquidation of his portfolio at the end of March, according to new filings.

Banks sold more than 37 million shares of Chinese online education company GSX Techedu in the first quarter, according to the latest 13F filings of publicly traded US stocks by investment managers.

The liquidation of Hwang also torpedoed stocks such as ViacomCBS and Discovery, and the banks also ditched those stocks. They have sold over 50 million shares of Viacom and over 21 million shares of Discovery.

It is not certain that bank sales are over either, as all three stocks have continued to decline since the end of the quarter.

But nowhere has Hwang’s effect been more pronounced than in GSX, which exploded as a result of the Hwang purchase despite many short sellers claiming it was a fraud.

The eight major shareholders of GSX were banks

Hwang, a so-called Tiger cub who made his debut with Julian Robertson’s Tiger Management, placed his bets via total return swaps which, like Institutional investor previously reported, were only disclosed as holdings of the banks that sold them to Hwang.

At the end of 2020, GSX’s top eight shareholders were Hwang Banks. (The second largest holder was another Tiger Cub, Chase Coleman’s Tiger Global, who sold his entire stake in3 million shares in the first quarter.)

It’s unclear what the bank’s GSX losses were in the Archegos liquidation, but on the heaviest sell date, March 29, the stock closed at $ 31.78. That would represent almost $ 1.2 billion in sales if all of those shares had been sold by then. The losses could have been considerably higher for some, as the stock had hit $ 149 earlier in the year.

Goldman surrenders 17 million GSX shares

The largest sales came from Goldman Sachs, which was widely regarded as the first bank to offload the shares it beneficially owned to Hwang. Goldman relinquished 82% of its GSX position during the quarter.

At the end of 2020, Goldman was the largest owner of GSX shares, with over 20 million shares, but had sold nearly 17 million as of March 31. By that time, it had slipped to ninth place among GSX owners.

Nomura Holdings has sold 77% of its stake in GSX, or8.25 million shares, from fifth to thirteenth place. He still held 2.4 million shares at the end of the quarter.

Meanwhile, Morgan Stanley, formerly the second-largest owner of GSX shares, has sold 53 percent of its shares, or 7.8 million. He remained the third owner, with 6.8 million shares, at the end of the quarter.

The second largest seller was UBS, which sold 31.5 percent of its GSX stock and held7.8 million at the end of the quarter. But because Goldman and Morgan Stanley gave up such high stakes, UBS finished in second place on March 31.

Credit Suisse seems to be the big loser. By the end of March, he had only managed to unload 6% of his stake, or 700,904 shares. This gave him the distinction of becoming the first owner of GSX, with 10.8 million shares.

Since the end of March, GSX shares have continued to slide. As of Friday afternoon, they were still down 35%, trading around $ 22 per share.

Morgan Stanley was Viacom’s biggest seller

Elsewhere, Hwang’s apparent ownership through banks was less concentrated, but still significant.

The main holders of Viacom were Vanguard and Blackrock as of March 31. But the banks that wrote swaps for Hwang were also among the biggest owners.

The biggest seller during the quarter was Morgan Stanley, which sold 86% of its stake, or 37 million shares. He now only holds 6 million shares. It was the third largest owner in the previous quarter.

Goldman sold 26 percent, or 2.7 million shares, to own 7.6 million at the end of March.

Credit Suisse, now Viacom’s fourth owner, drops 24.7%of its holdings in Viacom, or nearly 9 million shares. He still owns over 27 million shares.

Nomura, now Viacom’s fifth shareholder, sold only 4.6% of its stake in Viacom, or 948,298 shares. He currently owns approximately 19.5 million shares.

Viacom has yet to recover from the plunge. As of Thursday, stocks were still down around 8percentsince March.

Discovery was another big name hit by the liquidation, with Nomura and Morgan Stanley ranking as the biggest sellers in the quarter. Nomura sold its entire 7.6 million stake, while Morgan Stanley dropped 73%, or nearly 7 million shares, to end the quarter with 2.5 million shares.

Credit Suisse sold 33%, or 4.9 million shares, leaving it with 9.8 million. He is now the fourth owner of Discovery shares.

Meanwhile, Goldman dumped 61.6% of its shares, or 1.7 million, leaving it with 1 million shares.

Discovery was down 27% on Thursday since the end of March.



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