Morgan Stanley Dodged Potential $10 Billion Loss

Morgan Stanley Dodged Potential $10 Billion Loss

Morgan Stanley dodged major losses which have hit its peers after it reportedly managed to offload $5 billion in Archegos-linked shares before the unraveling of the family office’s collapse.

Morgan Stanley sold $5 billion of shares owned by Archegos Capital Management on March 25, according to a «CNBC» report, just one day before the broader wave of block trades shocked the market. 

A separate «Bloomberg» report provided more details about the sale, noting that it involved about 10 listed firms and was completed after the market close at a fixed discount. 

Hedge funds were the main buyers from the sale.

Most Archegos-Linked Exposure

Morgan Stanley was the largest holder of the top 10 stocks traded by Archegos, with about $18 billion in position overall at the end of 2020, according to the «CNBC» report, which cited unnamed sources.

Without fast offloading of Archegos’ shares, Morgan Stanley could have potentially faced an estimated loss of about $10 billion, the report added. 

Credit Suisse followed as the bank with the second-largest exposure at about $10 billion, though it was not as fortunate with related losses of 4.4 billion Swiss francs ($4.7 billion).