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[[File:Archegos Positions.png|250px|thumb|left|When [[variation margin]] attacks: ViacomCBS, Tencent, Baidu and Vipshop against the Dow (black)]]In the months leading up to March 2021, [[Archegos|Archegos Capital Management]] took [[Synthetic equity swap|synthetic]] positions [[Margin loan|on margin]] in on four comparatively [[Illiquidity|illiquid]] stocks — ViacomCBS, Tencent Music Entertainment, Baidu Inc and Vipshop. Trading across multiple [[prime broker]]s, Archegos’ total holdings were big enough to move the market. As | [[File:Archegos Positions.png|250px|thumb|left|When [[variation margin]] attacks: ViacomCBS, Tencent, Baidu and Vipshop against the Dow (black)]]In the months leading up to March 2021, [[Archegos|Archegos Capital Management]] took [[Synthetic equity swap|synthetic]] positions [[Margin loan|on margin]] in on four comparatively [[Illiquidity|illiquid]] stocks — ViacomCBS, Tencent Music Entertainment, Baidu Inc and Vipshop. Trading across multiple [[prime broker]]s, Archegos’ total holdings were big enough to move the market. As the [[Underlier|underliers]] appreciated, so did Archegos’ [[net equity]] with its [[prime broker]]s. Archegos used its equity to double down on the same investments, pushing the stocks up yet ''further''. The higher they went, the thinner their trading volume, and the more of the market Archegos represented. | ||
On 22 March, Archegos’ | On 22 March, Archegos’ Viacom position had a gross market value of USD5.1bn.<ref>{{credit suisse archegos report}}</ref> as it was [[Synthetic equity swap|synthetic]], Viacom may not have realised Archegos was the only buyer in town. In a cruel irony, Viacom concluded that market sentiment was so strong that it should take the opportunity to raise capital. Alas, only Archegos was even valugely interested in its USD3bn share offering at that price — and Archegos was tapped out of fresh equity with its brokers, so it could not participate. | ||
The capital raising failed and hell broke loose. |