Credit Suisse is still unraveling its positions from the blow up of Archegos Capital Management, traders told CNBC's David Faber, putting more pressure on a beaten-down media stock.
The investment bank was shopping blocks of different classes of Discovery stock on Tuesday, Faber reported. Discovery was one of the stocks that fell sharply in late March when the family office run by hedge fund veteran Bill Hwang failed to meet its margin call. Discovery's class A shares were down more than 4% in extended trading.
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Discovery, along with fellow legacy media player ViacomCBS, saw its stock rise rapidly in the first few months of the year, apparently bid upward by the highly levered Archegos. Discovery's class A stock rose from $30 per share at the end of December to $77 per share in mid-March before deflating. They closed at $40.38 on Tuesday.
Credit Suisse was one of the banks hit hardest by Archegos' risky trading. The bank reported a charge of $4.7 billion in losses from the trades and announced that two of its C-suite executives were stepping down.
Credit Suisse and other Wall Street banks will sell swap positions to hedge funds and family offices, allowing the clients to gain exposure to a stock even though the bank technically owns the shares. When the stock declines and the fund fails to meet its obligations, the bank can be stuck with the losses on the shares.
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