Citadel lost $35 million on Facebook trading
CITADEL, the investment firm run by Ken Griffin, said it lost money on Facebook (FB) trades in its broker-dealer unit.
The loss at Citadel Securities may be as much as $35 million, according to a person with knowledge of the firm, who asked not to be named because the information is private.
“Citadel Securities was impacted by issues with Nasdaq and the Facebook initial public offering,” Katie Spring, a spokeswoman for the Chicago-based firm, said on Saturday in an email.
Facebook’s share sale last week, the biggest technology initial public offering in history, was blighted by delays and mishandled orders. Nasdaq OMX Group’s systems were overwhelmed by order updates and cancellations before the socialmedia company’s shares began changing hands, delaying the start of trading and preventing the exchange from immediately telling investors whether transactions went through.
Shares of Menlo Park, California-based Facebook have slumped 13 percent since its May 17 initial public offering.
Citadel’s market-making business, which buys and sells equities for retail brokers, handles about 7 percent of US listed equity- option volume and 4 percent of US equity volume, according to the firm’s website. Citadel manages $13 billion in assets, including its main Kensington and Wellington hedge funds.
Knight Capital Group, a Jersey City, New Jersey-based brokerage and market maker, said on Friday that it lost as much as $35 million trading Facebook because of the technical problems at Nasdaq.
Separately, Andrew Kolinsky, who ran Citadel Execution Services, the market-making unit, is leaving next month after seven years. He will be replaced by Jamil Nazarali, who joined last year, the person said.
Citadel’s Kensington and Wellington funds have returned 9.3 percent this year through April, said the person. Hedge funds have gained an average 1.7 percent this year