Citadel scoops up Western Alliance shares on the cheap

by user


Shares of Western Alliance Bancorp rallied Tuesday, amid a broad bounce in the regional-bank sector, and after Citadel Advisors LLC disclosed that it has taken a big stake in the Arizona-based bank.

In a 13G filing with the Securities and Exchange Commission early Tuesday, hedge fund Citadel disclosed that it owned 5.78 million shares of Western Alliance, or 5.3% of the shares outstanding. That compares with the 1.31 million shares Citadel had previously said it owned at the end of 2022.

The new stake would make Citadel the fifth-largest shareholder of Western Alliance, according to FactSet data.

Citadel’s disclosure comes after Western Alliance moved to reassure investors twice in three days in the face of recent bank failures. The company said on Friday that “deposits remain strong” and said on Monday that it had taken “additional steps to strengthen its liquidity position,” including increasing borrowing capacity.

Western Alliance’s

stock rocketed as much as 53.0% in intraday trading Tuesday, before paring gains to close up 14.4% at $29.87. That was still the biggest one-day gain since it soared 23.6% on Nov. 29, 2020.

The stock was part of a broad rally in the regional-bank sector. The SPDR S&P Regional Banking exchange-traded fund

went up 2.1%, with 104 of 141 equity components gaining ground.

The stock’s bounce was impressive, but it follows a 63.5% plunge over the past three sessions to Monday’s closing price of $26.12, a three-year low, amid investor anxiety over the health of the sector. Tuesday’s rally has only retraced 8.3% of the selloff suffered in the previous three sessions.

Meanwhile, the regional-banking ETF retraced just 7.0% of what it lost over the previous three sessions, and the S&P 500
which climbed 1.7% on Tuesday, has retraced 47.6% of what it lost the previous three days.


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