Forced liquidation of positions by Archegos Capital adds to Viacom, Discovery plunge

According to a source with direct knowledge of the situation, part of the heavy selling pressure in select US media stocks and Chinese Internet ADRs on Friday was due to the forced liquidation of positions from the multi-billion dollar family office, Archegos Capital Management.

Archegos Capital was founded by former Tiger Management equity analyst Bill Hwang.

Media shares ViacomCBS and Discovery, which have posted massive gains this year, came under unusually heavy selling pressure late this week and at least two of the shares are said to be in question, along with the Chinese internet names Baidu, Tencent, Vipshop and several others.

ViacomCBS and Discovery closed more than 27% Friday, while Viacom gave more than 50% off for a week, while Discovery was down 45%. The companies have been badly shorted due to investor skepticism about their long-term outlook in a busy media landscape.

For the week, Baidu was down more than 18%, Tencent more than 33% and Vipshop more than 31%.

CNBC contacted Archegos Capital, but calls and emails were not answered. The source said the foreclosures were likely linked to margin calls due to heavily leveraged positions.

CNBC has also learned that Teng Yue Partners, an Asia-focused fund managed by another former Tiger Management analyst, Tao Li, was negatively impacted by withdrawals in several of its major holdings. Although the fund was set to decline in March, it was still positive, according to the source.

CNBC has also contacted Teng Yue.

– CNBC’s Leslie Picker contributed to this report.