WHAT’S GOING ON? Goldman Sachs and Morgan Stanley Reportedly Sold a Massive $19 Billion Worth of Shares in Chinese Tech and US Media Companies

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A massive sale of nearly $20 billion in stocks by Goldman Sachs and Morgan Stanley on Friday are causing market gurus to scratch their heads.

Goldman Sachs and Morgan Stanley have reportedly sold $19 billion worth of shares in Chinese tech and US media companies. Traders are now wondering what caused the unusually massive move and whether it will continue next week.

Goldman Sachs alone liquidated $10.5 billion worth of stocks in block trades on Friday, Bloomberg reported citing the investment bank’s email to clients. The first batch, that included $6.6 billion worth of shares of Baidu, Tencent Music Entertainment Group and Vipshop Holdings, was sold before the market opened on Friday. Later that day, the bank reportedly managed the sale of $3.9 billion worth of shares in American media conglomerates ViacomCBS and Discovery, as well some other companies, such as Farfetch, iQiyi and GSX Techedu.

Another US investment bank involved in the block trades, which are believed to have wiped $35 billion off affected firms’ valuations in just one day, was Morgan Stanley. The investment bank offered two batches of shares worth $4 billion each on Friday, according to the Financial Times.

While block trades, when sellers are looking for buyers for large volumes of securities at a price sometimes negotiated privately between the two parties, are a common thing, the scale of Friday’s moves raised eyebrows.

These are huge transactions at any time.  Experts are suspicious because of their size and the companies involved.

Will these transactions impact these stocks’ prices on Monday?  We think likely.

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