A big fund just blew up, rattling markets. What does that mean for your money?

A huge, overleveraged investment fund was forced to sell big blocks of shares on Friday, causing waves in markets – and some painful losses for some investment banks. John Stepek explains what's going on and what it means for your money.

Bill Hwang of Archegos
Bill Hwang of Archegos: forced to sell more than $20bn-worth of shares on Friday
(Image credit: © Emile Wamsteker/Bloomberg via Getty Images)

On Friday, an otherwise not-especially-dramatic day for stockmarkets, a few big stocks suffered huge declines as the market was roiled by a string of “block trades”. That is, big chunks of stock hitting the market all at once.

Companies including Chinese tech giants Baidu and Tencent, plus US stocks such as ViacomCBS and Discovery, saw their share prices tumble, with each of the latter sliding by 27% at one point.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.