Investor Bill Hwang set off a storm in the stock market last week when his firm, Archegos Capital Management, and its banks, began liquidating huge positions in blue-chip companies, according to people familiar with the transactions. The sales sent individual stocks swooning and have left at least two banks with major damage.
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What is Archegos and how did it rattle the stock market?
Mr. Hwang’s strategy began backfiring in recent weeks, as the stock price of companies in which Archegos had significant exposure, including China internet-search giant Baidu and Farfetch, began to sell off. Baidu’s stock price rose sharply in February, but by mid-March its shares had dropped more than 20% from its highs.
