Arab Today, arab today knight capital to get 400 million lifeline
Last Updated : GMT 01:53:12
Arab Today, arab today
Arab Today, arab today

Knight Capital to get $400 million lifeline

Arab Today, arab today

Arab Today, arab today Knight Capital to get $400 million lifeline

New York - Arabstoday

A group of investors will rescue embattled market maker Knight Capital Group Inc in a $400 million deal that keeps the company in business, Knight said on Monday, but comes at a huge cost to investors. The New York Stock Exchange said it will temporarily transfer Knight’s market-making responsibilities on more than 500 stocks and related Knight employees to Chicago-based Getco, until the recapitalisation is complete. The exchange said both companies cooperated with the transfer. The rescuing companies will buy convertible preferred stock with a 2 per cent dividend to save Knight, which was brought to its knees last week by a software glitch that caused errant trading in dozens of stocks. The deal is expected to close later on Monday morning. The preferred shares are convertible into about 267 million shares of common stock, Knight said in a US Securities and Exchange Commission filing, implying the investors would get a stake of a little more than 70 per cent in the company. The filing did not name the investors. On on Sunday, sources familiar with the talks identified private equity firm Blackstone Group LP, Getco and financial services companies TD Ameritrade Holding Corp, Stifel Nicolas, Jefferies Group Inc and Stephens Inc as the prospective buyers. J.P. Morgan analyst Kenneth Worthington, in a client note after the initial reports on the rescue on Sunday night, said the deal presaged Knight’s eventual breakup. “We don’t expect investors to value Knight as an ongoing entity given its technology glitch generated a pre-tax loss equal to (about) 30 per cent of shareholders equity and nearly wiped out the company in just 30-45 minutes of trading,” he said. Shares fell 30 per cent to $2.85 in heavy premarket trading after closing at $4.05 on Friday. Less than three weeks ago Knight traded for more than $12 a share. But even if Knight has been saved for now, the company could face litigation from shareholders who have seen the value of their holdings plummet. The potential liability could increase if it were found that Knight violated market rules. The top US securities regulator said on Friday that government lawyers were trying to determine if Knight violated a new rule designed to protect the markets from rogue algorithmic computer trading programs. Knight’s problems started early on Wednesday, when a software glitch flooded the New York Stock Exchange with unintended orders for dozens of stocks, boosting some shares by more than 100 per cent and leaving the company with the trading loss.  As the nation’s largest provider of retail market-making in New York Stock Exchange and Nasdaq-listed stocks, Knight buys and sells shares for clients. It also provides liquidity to  equity markets by stepping in to buy and sell stocks, using its own capital to ensure orderly, smooth activity.  Knight’s computers had been loaded with new software on Tuesday that was designed to accommodate a change on the NYSE, according to people familiar with the matter. When trading began, however, the computers poured a huge number of orders into the market.  For about 10 minutes it was unclear where the orders were originating, according to people familiar with the matter. After NYSE officials identified Knight as the source, it took another 10 minutes for the company to figure out the source.  The damage to Knight was swift. Whereas Knight once accounted for 20 per cent of the market-making activity in shares of Apple Inc, by midday on Friday it was the market maker for just 2 per cent of the share volume, according to data from Thomson Reuters Autex. Knight’s troubles highlight how vulnerable market makers are to the complex web of computers and software that constitute the modern marketplace. For investors already suspicious that the system might be fundamentally broken after the “Flash Crash” of 2010 and the botched Facebook initial public offering in May, the troubles at Knight have only added to concerns. From:Gulftoday

arabstoday
arabstoday

GMT 21:21 2017 Thursday ,19 October

Shaikh Nasser praises BIDEC 2017 royal patronage

GMT 20:39 2017 Thursday ,19 October

Tesla fired hundreds of employees in past week

GMT 13:46 2017 Thursday ,19 October

Samsung's revamped Bixby takes on Amazon Alexa

GMT 21:35 2017 Wednesday ,18 October

King congratulated by Premier on BIDEC success

GMT 21:27 2017 Wednesday ,18 October

Shaikh Nasser praises Derasat efforts

GMT 11:54 2017 Wednesday ,18 October

Airbnb rentals boom across Africa

GMT 18:06 2017 Tuesday ,17 October

Three companies offering to search for MH370

GMT 19:24 2017 Sunday ,15 October

Royal Jordanian eyes operating profit this year
Arab Today, arab today
Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today knight capital to get 400 million lifeline Arab Today, arab today knight capital to get 400 million lifeline

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today knight capital to get 400 million lifeline Arab Today, arab today knight capital to get 400 million lifeline

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Barcelona through George Orwell’s eyes

GMT 13:44 2017 Friday ,20 October

Barcelona through George Orwell’s eyes
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Tillerson heads to Gulf, downbeat

GMT 09:23 2017 Friday ,20 October

Tillerson heads to Gulf, downbeat
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Sweden to get biggest car factory

GMT 14:10 2017 Friday ,20 October

Sweden to get biggest car factory
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Actress Shery Adel happy for Egypt’s qualification

GMT 08:57 2017 Wednesday ,18 October

Actress Shery Adel happy for Egypt’s qualification
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 07:47 2017 Tuesday ,17 October

Hussein Fahmy happy for honoring in festival

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:43 2017 Wednesday ,18 October

Fake dentists ply brisk trade

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday