So some of the rumors from Friday's liquidation were apparently true. BIDU not mentioned by name but probably was also one of the stocks being liquidated.
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Hwang, the founder of now-defunct hedge fund Tiger Asia, ran a heavily leveraged family office and was reportedly the key figure in $35 billion in market losses Friday that sent Discovery, ViacomCBS, and GSX Techedu reeling.
Early Friday, Goldman Sachs reportedly told clients it was selling big blocks of several stocks because a fund is “involuntarily selling to meet obligations.” The sales, which were also conducted by other firms, were also described as a “forced liquidation” to meet margin calls.
https://www.institutionalinvestor.com/article/b1r550gj7lbfmt/The-Two-Tiger-Cubs-at-the-Center-of-Friday-s-35-Billion-MeltdownExcellent toilet read of one of the autists talking about Tiger Asia from the autist hive cluster. Who knows if his speculations are true but interesting nontheless.
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TLDR At the bottom for the stupids.
Edit - No awards! Save your money, spend it on stocks or something.
This is not financial advice. It is some of my own research, of which I have formed an opinion that it may be linked to GME.
Ok, I was gonna take a break from DD but fuck it, in the words of a goofy meme; i'll fuckin do it agen
I'm going to talk about 4 companies in this post;
Archegos Capital Management
Gamestop
Tiger Asia
Tiger Management
Who is collpasing?
Seriously, do you even watch any business news? Archegos Capital Management is a hedgie. And on friday, they got margin called.
Just google them and read an article or something, but in summary, stocks ike Viacom and the Discovery Channel FUCKING TANKED on Friday, triggered by a huge selloff by Archegos Capital. It has since come out that they were margin called and had to sell off shit to stay afloat.
If you don't know, a Margin Call is when some bigger boys than you (banks) say; "Hey bro, you aint got enough money to keep up this high risk trading, sell shit off now and get some cash or we're stepping in and closing all your positions until it's safe" In this case, Goldman and Morgan triggered the Archegos margin call.
We'll come back to Archegos Capital in a minute;
Tiger Management
Tiger are a hedgie and have been running for years. Now, let's cut straight to it - In 2018, they sent a letter to the board of Gamestop, expressing concern with how badly the company was being ran and that it needed to turn around... (Sound familiar?)
This was sent in May 2018 when GME was trading at $14/s.
Well, the GME board did what they do best - Fuck all. As a result, Tiger declared on a 13f in August 2018 that they had since exited all their GME positions. Aka, they sold all their shit off.
Simple terms - Tiger didn't like what GME were doing and warned them. GME Ignored them. Tiger sold all their GME stonks.
The common theme for Tiger is to trade using leverage to play with more money than you actually have, but they are quite good at it.
Tiger Asia
Tiger Asia was founded by Bill Hwang (remember this name).
Bill is classed as a 'Tiger Cub'. Basically, what happens is, you work at Tiger Management (the company I literally just spoke about 30 seconds ago), you make a name for yourself, you get good at being a hedgie, then you fuck off from Tiger Management and set up your own firm, aka, being a 'Tiger Cub'. Pretty cringe if you ask me but whatever.
So, Bill Hwang left Tiger Management and set up "Tiger Asia" to act as a hedgie himself.
Here's the problem...
Bill is crooked as fuck.
That's right, Bill was obviously a very naughty cub, because he (along with Tiger Asia) were subjected to a 3 year long investigation about our favorite subject.... stock manipulation.
Here's the sledgehammer;
The direct quote from the SEC;
Hwang committed insider trading by short selling three Chinese bank stocks based on confidential information they received in private placement offerings. Hwang and his advisory firms then covered the short positions with private placement shares purchased at a significant discount to the stocks’ market price. They separately attempted to manipulate the prices of publicly traded Chinese bank stocks in which Hwang’s hedge funds had substantial short positions by placing losing trades in an attempt to lower the price of the stocks and increase the value of the short positions.
FUCKING LOL. THIS IS SHORT SELLING ILLEGAL SHIT 101, RIGHT?!
Bill eventually admitted this. He was fined 44 million dollars (a 'settlement') and was barred from the industry for 5 years... This 5 years started in Jan 2013.
So, after all this annoying investigation shit, Tiger Asia has a destroyed reputation and is seen as an illegal manipulative short seller, so Bill did what any good hedgie does...
He rebrands Tiger Asia as.....
You guessed it!
Archegos Capital
So naughty cheating Bill set up Archegos and continued with his trading policy of over-leveraging your shit so much that you trade with more money than you have access to, which leads to this weeks inevitable margin call, and poor old Bill having to sell a shit-tonne of stock, crashing the prices in the process, just to stay afloat. Sucks if you invested in a safe stock like the Discovery Channel right? Because you just lost 30% in a day. Guess retail lose again. I'm sure there's a lot of boomers who got hit hard on Friday by this sell off. But Wall Street doesn't care about that.
Now remember, Bill was banned for 5 years, which means it was 2018 before he could get up to doing his business shit again.
Archegos Capital registered for a trademark in mid 2019. Aside from this, there are no filings at all with the SEC... Which is pretty fucking weird. Like, seriously weird. I'd love someone to find some, feel free to try, I can't.
Edit - u/bEAc0n sent me a DM. He can't reply because he is unfortunately banned, but he made a very very good observation which is fucking GLARINGLY obvious now he mentions it. I was looking for 13f's which disclose stock ownerships and so forth... But like beacon said... What doesn't need to be disclosed to the SEC? It's the goddam short positions of course!!
Anyway, the Archegos Capital website is down, nobody is returning calls to journalists and they haven't made a statement. This tells me one thing - They dun goofed.
Yeah yeah, hedgie dun goofed, but what about Gamestop?
Well, this is where a bit of assumption comes in. You need to ask; "Why would a hedgie get margin called?"
Well, I cannot see any recent trigger that could suddenly cause them to go belly up. It's not like a sudden banking crash just happened, the market has been a bit up and down and there's the pandemic, but nothing significant has occured to suddenly make poor Bill get margin called to the tune of billions of dollars. And nobody else is in this boat at the moment, just Bill and Archegos.
However - Bear this in mind...
The company he came from, the company who taught him everything, Tiger Management were invested in GME. They didn't like what they saw and wrote to the board. They still didn't like what they saw 3 months later and liquidated themselves out of GME when it was at $13 a share in mid 2018.
Bill is fed up of Tiger Asia being the crooked firm it is, so he pulls Archegos Capital out of his ass. He finishes his SEC imposed ban in 2018 and registered the Archegos trademark in mid 2019.
Bill ended his SEC imposed ban in 2018 and guess when GME started dumping itself in the toilet bowl? Thats right, 2018.
So, what happens in mid 2019? Thats right kids, GME takes an even bigger, huge steaming shit all the way down to an almost all time low of $3.97. It drops even further down to $3.50 at the start of 2020. It trends sideways for a while before it's Phoenix-like rise in late 2020 to the point where we are now at $180.
So, here is my theory, and note that it's only a theory;
Sneaky Bill learns his trade at Tiger Management. He then goes his own way to set up Tiger Asia. He loves a bit of illegal short selling stock market manipulation but gets caught. He closes Tiger Asia, then pops straight back up with Archegos Capital. His parent company, where he learned his trade (Tiger Management) were into GME and they nope'd the fuck outta there when they saw it was dying in 2018. This is 2018, when Bill can start trading again because he's a reformed character after his 5 year ban.
Cheeky Bill sees Tiger management bailed out of this burning GME plane and decides he wants in on the action. We know he loves some illegal short selling shit, his daddy company bailed out of the failing mess that is Gamestop, and he dived in to gobble up some short tendies.
Obviously this all goes bandit, because just 18 months later he's getting margin called as GME continues it's surge and he has to close out his Discovery Channel and Viacom positions, causing them to tank.
This is just a theory, but one that could hold water.
I'd totally watch what happens next week with this hedgie. Who knows, maybe it could be the first of several to fall? Maybe i'm totally wrong and it has nothing to do with GME.
At the very least, do some thought into getting discounted Viacom and Discovery stocks, because they are fucking knock down prices right now. Edit - Knockdown compared to where they were at. Some people are pointing out that their recent run up was quite unusual, so they may have settled to normal levels or may even tank some more. If they really start to tank even further next week, then take a look. Be prepared for possible volatility on Monday
TLDR
Archegos Capital are a hedgie. They just got margin called causing Viacom and Discovery Channel to tank. They are owned by a guy who is a crooked illegal short seller who has been banned from trading by the SEC. He loved to short sell shit in China illegally. He was banned for 5 years. Prior to his ban he owned a company that was spawned from another company who had invested in GME. I think a naughty hedge saw his parent company bailing out of a failing GME and jumped into the short bandwagon when his SEC ban was up. He got in late when GME was rock bottom, now GME has risen he might have just been anally boned by Goldman and Morgan for a margin call.
Side trivia
Just a little bit of a fun fact I found out while looking into this... Gabe Plotkin (ya know, the guy who founded Melvin) took home $846 million in 2020, netting him as one of the top hedge fund managers in the world... But not the top. The top spot was stolen by a guy called Chase Coleman, who managed to earn 3 billion dollars in a year. Guess who Chase works for?....
Tiger Management.
This post was edited by ofthevoid on Mar 28 2021 07:36pm