Credit Suisse Group Inc. (CS) stock plunged by 2.57% in the last trading closed while the CS keeps on declining by 10.88% during the pre-market trading as well after Nomura Holdings Inc. and Credit Suisse Group AG announced that they face relatively huge losses as some of the world’s biggest banks count their exposure to inaccurate bets through Archegos Capital Management. Credit Suisse is a leading financial services company in the world. Credit Suisse’s key strengths, such as its role as a leading wealth manager, specialist investment banking expertise, and strong presence in our home market of Switzerland, are the pillars of their strategy.
What is happening?
After Archegos failed to reach margin calls last week, lenders to Bill Hwang’s New York-based family office have been rushing to manage the repercussions. The enforced liquidation of more than $20 billion in Archegos-related positions has wracked stocks ranging from Baidu to ViacomCBS shedding light on the murky world of leveraged trading strategies facilitated by some of the biggest names on Wall Street.
Although the chaos has had a minimal effect on wider financial markets so far, banks and people familiar with the situation have suggested that the unraveling of Archegos-related bets could take longer. According to a statement from the bank that didn’t mention Archegos by name, Credit Suisse and other lenders were still exiting positions on Monday. Some people who are well aware of the situation mentioned that Morgan Stanley was buying a huge block of ViacomCBS shares on Sunday.
While it is too early to estimate the size of the loss, Credit Suisse believes it will be important and material to CS’s first-quarter results. On Monday CS shares, which are also engaged in a scandal involving the collapse of Lex Greensill’s trade finance empire, dropped as much as 14%.