Citadel Securities Unveils Stake in Silvergate Stock

February 14, 2023

minute read

There was a surge in Silvergate Capital stock on Tuesday after Citadel Securities announced that it had acquired a stake in the company that deals with digital currency banking.

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Silvergate SI +11.49% (ticker: SI), which equals about 1.73 million shares, was acquired by Citadel Securities in a filing with the Securities and Exchange Commission.

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In a recent interview with Trade Algo, Silvergate told Trade Algo that it does not comment on specific interactions with potential investors or current investors. A request for comment from Citadel did not receive an immediate response.

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During the week, Silvergate's shares jumped 4.4% to $15.35, while the S&P 500SPX -0.52% was down 0.8%. Silvergate's shares are expected to move higher as soon as some positive news is released. There has been a decline of 12% in the stock market this year and a decline of 88% in the last 12 months, according to Dow Jones Market Data.

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It has been a difficult year for the digital currency bank in the wake of the bankruptcy of one of its customers, FTX. After Silvergate announced that deposits had fallen by $8.1 billion in the fourth quarter, the stock of the company plunged during the first couple of weeks of January. A substantial reduction in the company's staff was also made to reduce costs and the dividend has been suspended as well.

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“Our company has made some difficult decisions recently, but I'm confident that these changes will enable us to serve our core customers in a responsible and profitable manner in the future,” Alan Lane, the company's Chief Executive Officer, said on the company's most recent earnings conference call.

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Citadel is not the only investment firm that has purchased Silvergate. The Soros Fund Management has taken up new stakes in the crypto bank, according to a filing that was submitted on Monday. Aside from that, the fund also bought into digital currency stocks such as Marathon Digital (MARA), and other beaten-down stocks such as Carvana (CVNA) and Lyft (LYFT) at a discount.