Barclays Hit by $590M US Market Mistake and Stake Sale

Shares of Barclays fell as much as 6% in early trading on Tuesday, after one of its major investors dumped a portion of the lender’s shares at a $1.2 billion discount overnight.

An anonymous investor sold 599 million shares on Monday night, facilitated by Goldman Sachs. The shares are roughly equivalent to a 3.6% stake, according to Refinitiv Eikon data.

The sale deals a further blow to Barclays just one day after it revealed a compliance error that led to an estimated £450 million ($589 million) loss from overselling of structured products in the United States.

Shares of Barclays (BCS) were down 3.3% at 115.22 pence as of 05:04 am ET on Tuesday. They had fallen 4% on Monday after the bank said it had oversold billions of pounds of securities over a period of about a year, exceeding the $20.8bn limit agreed with US regulators by $15.2bn. Dollars.

The products involved include two exchange-traded notes tied to crude oil and market volatility, a source familiar with the matter said. Barclays suspended sales and issuance of both this month.

Barclays shares sold were priced at 150 pence ($1.96) on Tuesday, near the top of the target range of 147.50 pence to 150.75 pence, but still more than a 6% discount to at Monday’s closing price, which put pressure on the share price.

The sale was slightly larger than the 575 million shares outlined on Monday night, netting the seller 899 million pounds ($1.18 billion), a person involved in the deal told Reuters, adding that the book was oversubscribed several times.

Capital Group sold 399 million shares on Monday, according to Eikon data, but it was unclear whether the sale was related to the Goldman Sachs-managed transaction.

Capital Group, one of the world’s largest investment firms and parent of the American Funds brand that is popular with millions of American investors and retirement savers, declined to comment.

Other major Barclays shareholders with around a 3% stake in Barclays include the Qatar Investment Authority (QIA) and Blackrock, according to Refinitiv Eikon data.

Blackrock (BLK) declined to comment when approached by Reuters on Monday, while QIA was not immediately available for comment.

Barclays said it would have to delay a planned 1 billion pound ($1.3 billion) share buyback due to the loss on US structured products, which it will have to incur as a result of buying back the securities. in question at its original purchase price.

The regulatory blunder is an early test for CS Venkatakrishnan, Barclays’ newly appointed chief executive, whose previous roles included running the bank’s global markets and risk operations.

Add Comment