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Hedge funds experienced significant deleveraging last week, marking the largest de-grossing since the meme stock craze in January 2021. The net long selling and net degrossing were notably high, as reported by Goldman Sachs Prime Brokerage (GS PB). This selling spree primarily targeted the world’s largest technology companies, which faced substantial losses. The deleveraging was largely concentrated in the long growth and short small caps strategies. Analysts are now questioning the potential knock-on impacts of these losses on those heavily invested in megacap growth stocks, with some wondering if this morning's reprieve is temporary.
"Hedge funds spent last week selling their winners at the fastest pace since the meme stock craze in January 2021 as the world’s largest technology companies got hammered." GS via @NKniazhevich https://t.co/o38hJ3TWJe
Max Hedge Fund deleveraging last week. So far was pretty isolated to the long growth short small caps unwind. Question is the knock on impacts of losses for those overweight megacap growth. Remains to be seen whether this morning is a reprieve or start of a re-leveraging. https://t.co/8nZB6spF0S
HF net long selling / net degrossing last week was largest since the GME incident -GS PB https://t.co/gIv4w15yIF