U.S. hedge fund blowouts lead to more sell orders, and credit sui generis investment banking business leaders will leave

The Paper's reporter Sun Mingwei

The impact of hedge fund archegos blowouts continues to grow.

On April 6, according to Bloomberg, citing people familiar with the matter, Credit Suisse's liquidation action has not yet ended, and on Monday, the investment bank listed a large number of trading orders for 3 related listed companies.

According to the person, the credit suisse block transaction includes 34 million viacomcbs, 14 million vipshop shares, and 11 million facettch, but the transaction price was not disclosed. Based on the current prices of the three stocks, the total amount is as high as about $2.3 billion.

Previously, the Financial Times quoted two people close to Credit Suisse as saying that the estimated loss caused by the archegos explosion to Credit Suisse was between $3 billion and $4 billion.

But according to the latest reuters report, Credit Suisse may suffer losses due to archegos blowouts that could be as high as $5 billion.

In this storm, Credit Suisse will also face a round of personnel restructuring.

Bloomberg's report suggests credit-credited head of investment banking Brian Chin is set to leave the company. People familiar with the matter said the news of Chin's departure would be announced as soon as Tuesday.

Credit Suisse's leadership is also discussing replacing Chief Risk Officer Lara Warner while retaining CEO Thomas Gottstein. According to the Financial Times, warner is expected to leave.

Two of the people familiar with the matter said Credit Suisse would inform investors of the latest impact of the archegos explosion, including the whereabouts of executives such as investment banking chief Brian Chin. Credit Suisse plans to evaluate the investment bank's block brokerage business, people familiar with the matter said.

On March 29, Credit Suisse publicly stated that the fund and several other related banks would liquidate their positions due to a U.S. hedge fund default last week. The losses resulting from the incident could have a "significant impact" on the first quarter of finances, and it is too early to quantify the exact loss figures.

Reuters said the company would release an update to investors on Tuesday.

From March 26, the archegos explosion broke out. A number of Wall Street banks have sold a large number of shares held by Archegos Capital, and the shares that have been forcibly liquidated include viacomcbs Inc. , who to learn from and discovery inc. wait.

Last week, Morgan Stanley, Goldman Sachs and Deutsche Bank all quickly dumped a large number of archegos capital holdings, and according to Reuters, all three investment banks have completed the liquidation of their opponents' archegos exposures.

The financial blog ZeroHedge quoted former Lehman Brothers trader Larry McDonald as saying that after considering leverage, the scale of losses that may be caused by the archegos outburst may reach $100 billion, and unless the relevant institutions come forward to debunk or clarify, this also means that there may be more stocks waiting to be sold than now.

JPMorgan Chase's team of analysts, led by Kian Abouhossein, wrote in a note to clients last week that given the size of archegos, the total losses banks could suffer as positions were withdrawn were between $5 billion and $10 billion.

Editor-in-Charge: It's Winter