Citadel Gambles $33 Million on ADC

ADC shares jumped 4% on news of the Citadel move Friday. However, the stock is down 62% in the past year as its sales have taken a steep slide. Recent mergers, combined with a recession, have helped crush ADC's performance.

Last month, ADC slashed its first-quarter sales outlook 14% below analysts' expectations. The stock fell below $5 and close to its 52-week low of $4.13. By some measures, the stock could be seen as a value, assuming telcos would start ordering gear again. The company has $631 million in cash, or $6.50 a share, excluding debt. And its market cap is about a third of its annual revenue.

ADC sells broadband networking gear to phone and cable companies. Phone titans Verizon (VZ Quote) and AT&T (T Quote) account for 32.5% of ADC's revenue.

Some of Citadel's other tech positions like Apple (AAPL Quote), Research In Motion (RIMM Quote) and Google (GOOG Quote) didn't yield much by way of returns in 2008, so a gamble on a fallen stock like ADC could to be an attempt to find some sunken value in the event of a recovery. There has also been occasional speculation that ADC could wind up in a deal with a rival as consolidation pressures mount.