What You Need to Know About ViacomCBS and the Archegos Capital Collapse

Archegos Capital Management is a hedge fund company that recently collapsed after it lost BIG on margin calls. When I say BIG I mean that with a capital B because they lost billions, around $20 billion to be more accurate. This happened because Archegos had leveraged positions on ViacomCBS (VIAC) and GSX Techedu Inc. and when the stock prices of these companies started falling, it triggered margin calls. This left Archegos in a bad position where they needed to sell off $20 billion in shares of those companies to take care of the margin calls.

A number of big banks were involved in this debacle. Goldman Sachs and Morgan Stanley were among the first banks to sell off Archegos’s holdings, and they both appear to have avoided taking major hits. Credit Suisse and Nomura Holdings on the other hand were not as lucky as sold their shares after the price had already tumbled. Both Credit Suisse and Nomura Holdings have told shareholders their businesses face “significant” losses.

One of the biggest impacts of this fiasco was ViacomCBS (VIAC) share prices dropping around 50% in value, from a $90-100 range down to its current value around $44. Now that the Archegos meltdown has forced the price of ViacomCBS down, is this a good time to buy? Some analysts are saying to sell, some are saying to buy. I’m not a professional analyst or financial advisor but I personally think it is a buy a this price.

ViacomCBS is the parent company of CBS, Paramount Pictures, MTV, Nickelodeon, Comedy Central, Showtime, and numerous other TV channels. They have moved towards streaming services with Paramount+ and PlutoTV. The stock price was definitely questionable when it quickly skyrocketed to around $100 per share, but at $44, I think it’s a good buy. Leave me a comment and let me know your thoughts on the Archegos Capital collapse or whether you think it’s a good time to buy some ViacomCBS or to stay away from that mess.

Photo by Hannah Wernecke on Unsplash

Author: vancealm

Working as a manager within two of the largest retail companies for the past 7 years has given me insight into consumer trends and essentially what people are buying on a normal basis. Why is that useful? Because it gives me a better understanding of the established and growing brands and companies that could potentially work to make YOU money. My name is Vance Alm and I am currently working on earning my MBA from the University of Nevada, Reno. I want to talk, teach, and find out more about investing in the stock market. Recently, there has been a lot of news around the stock market, hedge funds, and normal retail investors which has reignited the nation’s curiosity about investing their money. A lot of people want to be involved with the excitement of potentially making money by investing in the stock market, but they don’t know how or even where to begin. I want to explore the world of investment banking with you and talk about everything involved, from researching different companies to invest in, to the different online platforms or financial service companies you can use and everything in between. I am not a wealthy hedge fund manager and I am not an expert in the field, but I am passionate about the idea of having your money work for you. I am always learning more on the topic and I want to open the conversation on how to start investing and what companies to potentially invest in.

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