Shares of Credit Suisse (NYSE:CS) continue to slump as the company unwinds its positions related to the meltdown of hedge fund Archegos Capital.
Shares in the Swiss-based bank fell more than 2% to a four-month low and continue to underperform the European financial services sector. The decline comes as Credit Suisse continues to put large blocks of shares in media companies Discovery Inc, (NASDAQ:DISCA) and iQIYI Inc (NASDAQ:IQ) on the market following the implosion of Archegos Capital.
Credit Suisse has been selling Discovery and iQIYI shares at a discount to their trading prices.
Credit Suisse was one of the banks hardest hit by Archegos’ risky trading. The bank reported $4.7 billion U.S. in losses from the trades and announced that two of its executives were stepping down.
Credit Suisse and other Wall Street banks will sell swap positions to hedge funds and family offices such as Archegos Capital, 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, which is the case now with Credit Suisse.
