Stocks sold in an extraordinary torrent of recent block trades are poised for further selling pressure in the weeks ahead.
Goldman Sachs Group and Morgan Stanley have spearheaded more than $20 billion of these unregistered stock sales since Friday, according to people familiar with the matter, following a margin call on the family office of former Tiger Management trader Bill Hwang. The ensuing volatility could be just the start of a rough stretch for these stocks, based on one measure of performance for prior share sales the banks have brought on behalf of holders.
But the selling pressure looks more like a buying opportunity to those with longer time horizons, according to a special situations research firm. “We are looking at names where not only are there block trades, but also names that are falling in sympathy,” The Edge Consulting Group Chief Executive Officer Jim Osman said in an interview. “Forced selling is where investors who have more than a five-minute view can make some of the best investments ever.”