March 29, 2021 Sign Up

By Overheard on Wall Street

"What you get by achieving your goals is not as important as what you become by achieving your goals." –Zig Ziglar

Good morning! The yuge ship was partially freed but remains stuck in the Suez Canal, world trade is at risk (a casual $9B in goods disrupted each day), but the memes have never been better. See Memes of the Day below for a couple of our favorite ones (sorry Jefferies).

We kicked-off a (worst) work-life balance March Madness for Investment Banking groups on @overheardonwallstreet's Instagram story last week. As expected, Moelis is absolutely destroying its opponents so far. Don't forget to vote for the Final 4 and Championship rounds this week.

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1. Story of the Day: The Greatest Margin Call

Ex-insider trader and ex-Tiger cub, Bill Hwang is at the center of of the greatest margin call of all time. On Friday, his firm Archegos Capital, was forced by some banks to sell more than $20 billion in shares after some of his bets went haywire. Hwang ran a long-short strategy, with an exceptionally large (pre-08 Lehman levels) leverage, meaning that for every dollar of his own, he’d pile on several times as much in debt, from banks such as Goldman Sachs.

Leverage is a beautiful thing when it works but when it doesn’t, banks come margin calling to get their money back. That happened on Friday, and triggered a frenzy to sell Archegos-owned shares in massive blocks, which sent stocks such as ViacomCBS and Discovery crashing (both posted their biggest daily losses ever).

Short Squeez Takeaway: Hwang has a murky past to say the least. Why Goldman Sachs was lending an ex-insider trader huge sums of money on highly leveraged positions is a question only DJ D-Sol can answer. Oh and the drama might not be over yet, brace yourselves for an exciting open on Monday. (We hope you don’t own any of the stocks Hwang is offloading)

2. Markets Rundown

• U.S. equities recorded the biggest gain in three weeks on Friday on optimism over the pace of vaccinations after a turbulent week.

Movers & Shakers

• (+) Snowflake (SNOW) +8% as Evercore initiated an outperform rating.

• (-) ViacomCBS (VIAC) & Discovery (DISCA) -27% on downgrades from Wells Fargo and MoffettNathanson analysts and Archegos liquidation.

In Other News

• Wall Street’s sleepless nights (NYT)
• New York lawmakers agree to legalize recreational marijuana (AP)
• Funds bet on a consumer boom to rival ‘Roaring Twenties' (Bloomberg)
• The key to opening schools: Better air flow (Axios)
• The underdog who became a top investor at CapitalG (CNBC)

3. Book of the Day: What It Takes

A book from the private equity guru himself, Stephen Schwarzman (CEO of Blackstone) takes us on a journey from folding handkerchiefs in his father’s linen shop to Blackstone, managing more than $500 billion today. It's an empowering, entertaining, and informative guide for anyone looking for inspiration.

4. Career Tip of the Day: Don't Forget to Mock It

Everyone thinks they know how the three financial statements work till someone asks them in an interview. While studying for an interview, studying locked up in a room is great but knowing how to answer questions quickly and concisely is a totally different ball game. This is why mock interviews should be an important part of your interview preparation. 

Mock interviews are a great way to simulate the actual interview: 1) You get used to different styles of interviewing, 2) It gives you a chance to practice what you have learned (yes it's better than practicing in front of the mirror). We would recommend doing at least 5-6 mock interviews before an important interview.

5. The Daily Visual: Streaming Wars

Source: Yahoo Finance

6. Memes of the Day

@hoeingforyield Instagram

@overheardonwallstreet Instagram

@edwards_deming Twitter