Hedge fund giant Citadel is placing a daring bet on ADC Telecommunications ( ADCT, buying a 5.7% stake in the slumping telco gear supplier.

In a federal filing Friday, Citadel said that it had acquired 5.8 million shares of the Eden Prairie, Minn., tech shop, making it the second-largest institutional holder of ADC stock. Lord Abbett & Co. is the largest with a 9.5% ownership stake.

Though the $33 million move is a relatively tiny outlay for Citadel, it is a sign perhaps that the money manager is putting some of its cash to work.

Citadel had managed as much as $15 billion in investments in 2008, but the market's collapse and a few bad bets in the financial sector helped knock down the values of some of its biggest funds. The Chicago firm's financial stability came under scrutiny in the fall as rumors circulated about the company's efforts to fund its obligations by selling assets.

In a rare public statement in October, Citadel chief Ken Griffin spoke to Wall Street on a conference call about his company's cash position in an attempt to calm investors' fears. According to a Fortune story, Griffin said his company had 30% of its capital in cash and an $8 billion credit line available.

A month later Griffin appeared on Capital Hill to field questions from a Congressional panel about the hedge fund industry. Griffin, whose firm reportedly had a nine-year streak of 20% or more annual returns, said that the post-Lehman climate made for a "challenging eight weeks for Citadel."

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 - Get Report) and AT&T ( T - Get Report) account for 32.5% of ADC's revenue.

Some of Citadel's other tech positions like Apple ( AAPL - Get Report), Research In Motion ( RIMM and Google ( GOOG - Get Report) 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.