Several Chinese tech companies have been caught in the implosion of Tiger Asia Management founder Bill Hwang's family office after it defaulted on a number of margin calls last week.
Archegos Capital invested in a number of Chinese technology companies listed in the U.S. including conglomerate Tencent Music Entertainment Group and internet services provider Baidu, most of these stocks are now taking a beating as Hwang's backers look to recoup their losses.
The family office was forced by lenders starting last week to sell upwards of $20 billion in shares of various American and Chinese media and technology companies.
"I was surprised to see that Alibaba wasn't one of his holdings but it was interesting to see what ADR's he chose, Vipshop and QQ were the target of short reports a while ago," said one analyst, speaking to Business Times on condition of anonymity.
The stock of one, Beijing-based digital education business GSX Techedu, lost nearly half its value since Friday when banks began block selling. Shares in the NYSE-listed company fell from $66.68 on March 25 to $33.29 by market close Tuesday.
Chinese e-commerce website Vipshop Holdings dipped by 44% from a peak of $44.86 last week and ended Tuesday at $30.93, while Baidu fell 23% Friday but has since clawed back most of the losses.
"It can't be a coincidence that he just happened to have a family office that requires less documents and then he picks up Chinese tech ADRs, several of which said they would leave NY and list in HK," the analyst noted.
Hwang, a so-called 'tiger cub' or protégé of American hedge fund whiz Julian Robertson, has had several run-ins with regulators around the world.
His hedge fund Tiger Asia Management pled guilty to insider trading and paid regulators $60 million to avoid criminal charges. Two years later, Hwang was barred by Hong Kong from trading securities over more allegations of trading with insider knowledge.
Market analysts Business Times spoke with expressed surprise that Nomura, who warned on Monday it faced a potentially "significant loss" over the matter, had taken him on, given this track record.
Shares in the Japanese bank, which reportedly extended more than $2 billion to Hwang, plummeted 16.3% on Monday and fell another 2% Wednesday.
