Citadel Securities to get its first outside investment, is an IPO next?   

Citadel securities

Citadel Securities, the electronic-trading firm majorly owned by Ken Griffin, is ready to get its first outside investment. Sequoia Capital and the cryptocurrency investor Paradigm have decided to invest around $1.15 billion.  

According to the deal, Sequoia partner Alfred Lin will join the Citadel Securities’ board.   

Managed separately from Citadel, Citadel Securities was founded in 2002 and has grown into a global giant that trades equities, options, futures, and other assets. Ken Griffin has built his fortune from the $43 billion hedge fund.   

A report stated that Citadel Securities handles about 27% of the shares traded in the U.S. stock market every day. Most of this volume comes from the processing trades for the companies such as Robinhood Markets.   

The newly delivered deal between Sequoia Capital, Paradigm, and Citadel Securities, will give the latter’s capital to increase and expand globally. The deal could also be a precursor to an IPO (Initial Public Offering) for the business. However, no plans for the listing have yet been disclosed.  

Sequoia, one of the largest venture firms in the U.S., has around $80 billion for management. It has backed companies like Airbnb Inc. and Google before their listings as an IPO.   

Paradigm is more focused on crypto and Web3, which are the reimagination of the internet. Citadel Securities is likely to take an interest in and incorporate in the future after they become more regulated. 

Ken Griffin, however, has been a crypto skeptic and has avoided trading digital currencies. So, the recent deal with Paradigm questions the hedge-fund billionaire’s prior crypto phobia.  

Ken Griffin has considered deal-making previously too. In 2015, the hedge fund considered going public, and the move was also weighed before the financial crisis. Earlier in 2019, Blackstone was also in talks to buy a stake in Citadel Securities and Citadel. At that time, the hedge fund had a value of $5 billion and $7 billion.  

During the Pandemic, the explosion in trading volumes and volatility across the market boosted the hedge fund’s revenue. Last year’s Reddit’s fueling the GameStop frenzy and other meme stock trades drew the social media’s attention to Citadel Securities’ relationship with the online brokerages. After this, Citadel faced the SEC, and Ken Griffin became one of the most trending topics on social platforms like Twitter and Reddit.   

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