‘Unprecedented’: Wall Street Reflects on Goldman’s Block Trading Wave


Photographer: Michael Nagle / Bloomberg

As Wall Street speculated on the identity of the mysterious seller behind the massive $ 10.5 billion in block deals executed on Friday by Goldman Sachs Group Inc., investors also pondered how unprecedented the sell-off was and if there is more to come. .

The sales lit up traders’ chat rooms from New York to Hong Kong and were part of an extraordinary spree that wiped out $ 35 billion of the values ​​of leading stocks ranging from Chinese tech giants to American media conglomerates.

“I’ve never seen anything of this magnitude in my 25-year career,” said Michel Keusch, portfolio manager at Bellevue Asset Management AG in Switzerland.

Goldman sold $ 6.6 billion in shares of Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. before the market opened in the US, according to an email to clients seen by Bloomberg News. That move was followed by the sale of $ 3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc., according to the email.

Block trades (the sale of a large number of shares at a price that is sometimes traded outside the market) is common, but the size of these trades and the multiple blocks that hit the market during normal trading hours do not. are.

“This was very unusual,” said Oliver Pursche, senior vice president at Wealthspire. Advisers, which manages $ 12 billion in assets. “The question now is: Are they finished? Is this over? Or will markets be hit by another wave of block trading on Monday and Tuesday? “

Read more: Goldman sold $ 10.5 billion worth of shares in a wave of block trading

The trades sparked price swings for all stocks involved in high-volume trading, shocking traders and sparking talk that a hedge fund or family office was in trouble and forced to sell.

The situation is concerning “because we don’t have all the answers as to whether this was the liquidation of a single fund or more than one fund, or if it was a fund liquidation to begin with and the reason behind it,” Pursche said.

“It can be difficult for a manager from a positioning standpoint. Another wave of block deals may force fund managers to reassess their commitment to some stocks, ”he said.

‘Without precedents’

Frederik Hildner, portfolio manager at Salm-Salm & Partner GmbH in Wallhausen, Germany, called the move “unprecedented.” He added: “The question is why did these bloc trades occur? Does one company know something that others do not, or were they forced in some way to reduce risk?

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