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ViacomCBS, Other Archegos-Linked Stocks Rise After New Block Trades

ViacomCBS and other stocks linked to the unwinding of equity positions within Archegos rebound after a reported sale of additional blocks totaling more than $2 billion.

ViacomCBS  (VIACA) - Get ViacomCBS Inc. Class A Report and other stocks linked to the unwinding of massive equity positions within Archegos Capital Management recovered Tuesday after Credit Suisse  (CS) - Get Credit Suisse Group American Depositary Shares Report reportedly sold additional blocks of stocks that totaled more than $2 billion.

ViacomCBS was up 2.57%, while Farfetch  (FTCH) - Get Farfetch Limited Class A Report, another big holding of Archegos, was up 1.57%. Vipshop  (VIPS) - Get Vipshop Holdings Limited American Depositary Shares each representing two 唯品会 Report Holdings also rose after the Swiss bank reportedly unloaded shares. Shares of Discovery  (DISCA) - Get Warner Bros Discovery Inc Com Ser A Report, another stock impacted by Archegos-related selling, was up 3.91%.

ViacomCBS and Discovery both posted double-digit percentage losses late last month, brought down by giant block trades initiated by Goldman Sachs and Morgan Stanley after Archegos - the family office of former Tiger Management trader Bill Hwang - reportedly failed to meet margin calls.

Archegos held large, concentrated positions in companies and held some positions via swaps. Swaps are contracts brokered by Wall Street banks that allow a user to take on the profits and losses of a portfolio of stocks or other assets in exchange for a fee. 

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The losses reportedly left Nomura Holdings  (NMR) - Get Nomura Holdings Inc ADR American Depositary Shares Report and Credit Suisse facing potentially significant losses.

The cascade of trading losses has produced tremors in financial markets amid concern that banks’ exposure to the massive unwinding of Archegos’s leveraged equity bets may spark other margin calls and losses, leading to systemic liquidity issues similar to what happened to Long Term Capital Management, a highly levered hedge fund that imploded in 1998.

ViacomCBS and Discovery had skyrocketed threefold over the previous six months before the recent selloff, making them two of the best performers on the S&P 500 Index. Both stocks posted their steepest declines on record last Friday.

At last check, shares of ViacomCBS were up 2.57% at $47.96, shares of Farfetch were up 1.41% at $50.41 and shares of Vipshop were up 2.48% at $30.52. Discovery shares were up 3.91% at $43.27.