Welcome back to the channel everyone today, i want to talk about how citadel has run out of cash and is desperate for more so desperate, in fact that ken griffin has even sold off some of his personal ownership in citadel to external investors like sakai capital. So stay tuned and let's make some money, and now i want to dive straight in with the key information. So first i want to go through this article. That's just been released if you've already read the article feel free to skip ahead a little bit until i get to the meat and potatoes and talk about how citadel has run out of money and why they're desperate for more so the article is titled ken griffin Citadel securities receives its first outside investment from sakoa.

At a 22 billion valuation, citadel will receive 1.15 billion dollars in proceeds, valuing the market maker at about 22 billion dollars and obviously citadel securities is managed separately from the 43 billion hedge fund named citadel. Now the first thing that struck me is odd as to why this is even happening is because ken griffin has another company, a hedge fund called citadel securities that manages 43 billion dollars. Why couldn't ken have just taken some of his 43 billion and lent 1.15 billion to citadel the market maker intergroup? Loans are absolutely allowed, even in this instance, where there's a hedge fund and a market maker, the two companies can still lend money between each other, and i think the obvious answer here is because citadel securities, the hedge fund, is up to its neck in unrecognized losses And they don't want to sell off 1.1 billion of their assets to lend to citadel the market maker. I imagine if citadel securities sell off a billion of these assets and recognize some of those losses, they won't be able to meet their margin, calls and that's why they needed external investment to lend to the market maker and obviously the market maker has created.

So many synthetic shares they are also up to their neck in synthetic shares and they're, also sitting on unrecognized losses or massive debt obligations and also can't meet their margin requirements. Citadel securities is set to receive its first outside investment ever with the market maker, owned by billionaire ken griffin, getting capital from sakaya capital and paradigm. Now i think this is a move that just shows how desperate ken griffin really is. This is his first ever time taking on external investment, he's managed to keep citadel the market maker and citadel the hedge fund 100 owned, and therefore he gets all of the money.

This will be a massive hit to ken griffin's ego, because now he can't say that he's the 100 owner of citadel securities, it's not solely his firm anymore. Yes, ken has also been paying himself about a billion dollars before tax a year for some time now, but at the same time, i'm assuming he spent it all or put all of that money back into citadel and still needs more you'd. Think after the january rally, which led to a surge in business for citadel, where the company saw its net trading revenue surged to 6.7 billion dollars a year in 2020, which was nearly double its previous highest set in 2018, you'd. Think, after making all of that revenue in 2020, that citadel wouldn't still be desperate for external investment, but obviously that just goes to show that citadel, the market maker and citadel the hedge fund are both desperate for cash, even though they're making so much money they're having To use it all to support this massive synthetic short position right now, you can currently get a free share of amc.

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Bringing the total to five free shares, valued up to seventeen thousand five hundred dollars and that free share of amc. Now i also found this article hilarious, because the article even tries to blame ken griffin buying the constitution on his own son. It says i was sitting at home in new york and my son calls me to say dad you have to buy the constitution. Griffin said now.

The thing that i find funny about this is that in an article from 2015, it said that ken griffin's three children were all under the age of 10 and therefore, which 15 year old, 14 year old, 13 year old kid tells his dad to buy a copy Of the constitution, clearly, this is just another instance of ken griffin trying to blame something on other people and not taking the blame himself, but so why is ken griffin accepting external investment now of all times? Well, as immorton gme says? Why now is it a coincidence? I don't think so right now, there's a massive amount of open call and options on both amc and gamestop that expire on the 21st of january 2022.. Obviously, a lot of these are going to be divorced, puts that potentially need to be rolled and the can kicked again or these market makers and hedgies have to buy back. All of those failed delivers. That's obviously a very coincidental timing and all of these fail to delivers are held by market makers.

Citadel is therefore sitting on a huge pile of toxic waste which is about to blow. Obviously, tons and tons of these options are about to expire, worthless and expire out of the money, and therefore citadel has all of these options that are worthless and obviously, when these expire worthless, that's going to be a massive blow to citadel's margin capital and they will Fail to meet margin requirements and that's why they've spent 140 million on gamestop alone in the last five days to push the price down. Obviously, they're trying to get any of these puts to expire in the money just so that all of them don't expire, worthless and, as rock god said, citadel announcing. This investment is basically them saying.

We are proud to announce that we weren't meeting capital requirements and asked our golf buddies to bail us out, or else we're gon na lose market maker status, and not only that but citadel have had to ask their golf buddies to bail them out or else citadel Is gon na be taking down everyone else with them? Now some of the guys over in the discord were asking me tom. Why is sequoia investing in citadel? Don't they know that citadel have massive unrealised losses and massive amounts of synthetic shorts that are about to blow up? Why is sequoia lending money to ken and effectively bailing him out? I'm sure you remember what happened when number of stocks like viacom cbs, when bill huang and archaegos capital management went down losing 20 billion in a matter of a few days. But you also know that citadel leverages its portfolio that 43 billion portfolio a ratio of around seven to eight to one basically meaning that citadel doesn't just have 20 billion dollars to lose. They don't just have 43 billion dollars to lose.

They actually have around 250 billion dollars worth of assets that could be lost if citadel gets liquidated. So imagine what happened to the stocks that bill huang and our chaos, capital management was holding and then imagine that amplified by about 12.5 times. And this is why ken's golf buddies had to bail him out, because, obviously, if ken and citadel go down well, there's going to be a large portion of the market that goes down with him. But so who is sakura capital? And why are they pouring money into citadel other than to save their own asses? Robin hood actually received investment from rumored capital and several other venture capital firms, including sakoa capital index ventures and iconic capital as well, and therefore not only does sakai capital now have their finger in citadel's pie, but they also already had their finger in robin hood's pie And on top of that, sakura was also an early investor in melbourne capital as well, and therefore sakura basically has all of their fingers in all of these pies and are basically the glue holding everything together.

Sakura was an early investor in melvin capital. They were an early investor in robin hood. Obviously we know that citadel works very closely with robin hood and also previously bailed out melvin capital, but now it's citadel that are needing the bailout. Robin hood obviously can't lend that money.

Melvin capital obviously also can't lend that money so who's there to glue everything back together. Well, it's sakura sakura actually have about a 400 million dollar investment in robin hood and they know that if citadel goes down, then robin hood goes down as well and therefore sakura will be staring down the barrel of a 400 million dollar loss. Now, from a quick look at sakura's 13-f filing, it doesn't look like they have a current gamestop or amc short position, but i do think they're somehow affiliated because back in january 2021, sakoa capital actually denied pressuring robin hood to stop game, stop trading and turn off The buy button after a viral reddit post rumors that sakoa had pressured robin hood into barring some transactions came from a thursday post on reddit from an alleged employee at robinhood. The post alleged that robin hood founder vladimir tenef had received calls from sakura capital and the white house that pressured them into closing trading on certain stocks and here's the actual tweet from sakoa back in january of 2021, assuring us that they did not pressure robin hood.

To turn off the buy button, maybe we've almost been going after the wrong fund and the wrong market maker all this time, and actually it's the koa capital that pressured robin hood to turn off the buy button now. So why is ken griffin doing pretty much anything? He can to get any form of cash into citadel. Obviously, it's because he's desperate for cash and he's willing to do anything it takes to survive just another day. I wanted to show you this video of ken griffin talking about how he survived 2008, where he was losing hundreds of millions of dollars each week and everything he did was to buy them just one more day and as this poster says, i believe this is exactly What they're doing again right now! That's why he's accepting external investment for the first time ever in his career, which is going to be a massive ego, knock for him and it's because he just wants to survive one more day and not foreseeing the financial crisis of 2008 was the greatest mistake of My career, you see, we are paid to see the unforeseen and i did not grasp the magnitude and depth of the financial crisis that was growing in our banking system.

A crisis so large that virtually every bank in america would have failed. If the government had not intervened, every bank would have failed and after lehman failed, we found ourselves fighting for our very survival we were caught in the maelstrom. We were losing hundreds of millions of dollars a week, if not more cnbc parked a van in front of citadel waiting to break the story of our demise, but we weren't going to give them that story. You see each day we took the steps needed to keep our business going, we sold assets, we closed business lines, we let people go, we suspended redemptions.

Our management team absorbed 500 million dollars of costs on behalf of our investors, to demonstrate our commitment to the business and our belief in the future, and each thing we did bought us one more day and day by day we bought ourselves a future. Often the choice was between painful and more painful, but the one thing we didn't do was put things off by the end of 2008. We had lost half our capital, but we were still in business and we kept our team and our team kept fighting tobias. Another day you see with the right people with the ability to execute and with the willingness to make the tough decisions we were able to save our firm.

So, just comparing that to what's happening right now, ken griffin and citadel have obviously suspended redemptions again, as it now takes around 16 quarters for citadel investors to withdraw their money. I assume they're also making people work overtime and potentially letting people go if they can't afford to pay them. They're also, probably selling off assets, and now ken griffin has resorted to doing something that he didn't even do in 2008, which is take on external investment. Back in 2008, ken didn't take any government loans and didn't sell off any of his shareholdings.

So for him to do that right now he must be very desperate, so guys be sure to. Let me know down in the comments below what you think about ken griffin citadel running out of cash and how they are absolutely desperate and, as always guys if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to channel and think that notification bell, because that way, you'll be alerted when i upload a new video cheers.