Citadel's Stock Purchases Overview

Sep 16, 2024

Lecture on Citadel's Recent Stock Purchases

Introduction to Citadel

  • Citadel is one of the largest hedge funds globally.
  • Founded by Ken Griffin, who started trading stocks at Harvard as a sophomore.
  • Citadel now holds hundreds of billions in assets.

Citadel's Dual Ownership

  • Ken Griffin owns both Citadel Advisors (hedge fund) and Citadel Securities (market maker).
  • Potential conflict of interest due to ownership of market information.
  • Speculation in the investment community about insider information use, though no illegal actions are known.

Recent Significant Stock Purchases

  • Citadel's large stock purchases are released to the public quarterly.

1. Bristol Myers Squibb (BMS)

  • Increased position by over 3,000% to nearly half a billion dollars.
  • Stock price has declined by about 40% in recent years.
  • Offers a high dividend yield of nearly 5%.
  • Concerns include patent expirations and lack of new drugs.
  • Recent acquisitions include companies with potential blockbuster drugs.
  • Ranked #2 due to attractive dividend and potential turnaround.

2. Disney

  • Increased position by over 300% to over half a billion dollars.
  • Once a beloved company, now faces backlash and poor performance.
  • Notable decline in stock price, over 50% from its peak.
  • Streaming services turning to profitability; potential turnaround.
  • Ranked #2 due to turnaround potential.

3. QXO

  • Increased position by over 575,000% to $667 million.
  • Venture company focused on building products distribution.
  • Founder has a strong track record of successful businesses.
  • Currently lacks financial performance data.
  • Ranked #3 due to proven leadership and Citadel’s investment.

4. Invesco QQQ ETF

  • Increased position by 584% to over $1.5 billion.
  • Tracks NASDAQ 100; large exposure to tech.
  • Not favored for personal investment strategy; ETFs are more suitable for passive investors.
  • Ranked last at #4 due to personal preference for individual stock selection.

5. SPY S&P 500 ETF

  • Increased position by over 50% to over $3 billion.
  • Tracks S&P 500; main benchmark for US market.
  • Similar feelings as QQQ; QQQ preferred due to tech focus and performance.
  • Ranked #5.

Conclusion

  • Citadel's stock purchases are generally agreed upon by presenter.
  • Personal rankings provided with Bristol Myers and Disney at the top.
  • Encourages audience engagement and feedback on rankings and purchases.