Ken Griffin’s Fortune Jumps $5 Billion In A Day After Investment From Sequoia Capital, Paradigm - Forbes | Canada News Media
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Ken Griffin’s Fortune Jumps $5 Billion In A Day After Investment From Sequoia Capital, Paradigm – Forbes

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The hedge fund mogul known for his role in the GameStop stock craze and buying the U.S. constitution climbs seven spots among the nation’s richest.

Investment tycoon Ken Griffin is more than $5 billion wealthier after venture capital firms Sequoia and Paradigm invested $1.15 billion in market making firm Citadel Securities, according to Forbes’ estimates. The deal, announced Tuesday, values Citadel Securities at $22 billion. Griffin sold around 5% of his stake in the firm, Forbes has learned, meaning the billionaire is walking away with more than $1 billion in cash, pre-tax.

The value of Griffin’s remaining stake in Citadel Securities has also risen, thanks to the firm’s higher valuation. Griffin’s 80% stake is now worth an estimated $15.9 billion, Forbes estimates, up nearly $5 billion. (Forbes applies a discount to private company stakes.) In all, Forbes estimates Griffin to be worth $26.5 billion, up from $21.3 billion before the deal. He is now the 26th richest person in America, jumping more than seven spots thanks to the transaction.

The new investment marks the first time Griffin has accepted any outside investment for his electronic trading firm, which he founded in 2002 and which says it processes more than one fourth of all U.S. stock trades. About 15% of the privately held company is owned by partners at Citadel Securities, which employs 1,200 people.

Citadel Securities has grown amid the pandemic surge in retail investing, as day traders have flocked to zero-fee brokerages like Robinhood. A market maker, Citadel Securities pays brokerages to execute stock transactions made by investors; it makes money on the spread between what it pays for stocks and what it sells them for. The firm generated a record $6.7 billion in revenue in 2020, and, according to a company spokesperson, had an even better 2021. 

Griffin, 53, began trading in 1987 from his Harvard dorm, installing a satellite dish on the roof to get real-time stock quotes. He founded hedge fund Citadel LLC in 1990, which today manages over $39 billion in assets. He owns an estimated 85% of Citadel LLC, plus more than $1 billion worth of art and personal real estate, including work by Jean-Michel Basquiat and a New York City penthouse he bought for $238 million in 2019 in what was then reported to be the most expensive home sale ever.  

Little known outside financial circles, Griffin was thrust into the spotlight last year during the Gamestop investment craze as Citadel Securities’ relationship with mobile trading platform Robinhood came under scrutiny when Robinhood clamped down on investors’ ability to make trades. In February 2021, Griffin testified before the U.S. House Financial Services Committee alongside Robinhood CEO Vlad Tenev and others involved in the meme stock episode. A later report from the Securities and Exchange Commission debunked conspiracy theories about illegal activity between Citadel Securities and Robinhood.

In November, Griffin made headlines when he outbid a cryptocurrency investment group for a first-edition copy of the U.S. Constitution, shelling out $43.2 million for the historical document at a Sotheby’s auction. Griffin is also known as a GOP mega donor. In the 2020 election cycle, he donated more than $67 million to Republican groups and candidates, according to a report from OpenSecrets.org. Griffin also donated to President Biden’s Inaugural Committee.

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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