Knight Capital Group (KCG) Halted Knight Gets $400 Million Lifeline Down 31% in Premarket

Knight Capital Group (KCG) Halted Knight Gets $400 Million Lifeline Down 31% in Premarket.

 

Updated The Knight Capital Group reached a deal on Sunday to secure a financial lifeline from an investor group that included TD Ameritrade and the Blackstone Group, capping its efforts to stay alive, people with direct knowledge of the matter said. The lifeline came together days after the trading firm disclosed a $440 million trading loss tied to a glitch in its software that sent shares in 148 companies gyrating on Wednesday. Under the terms of the plan, the new investors -- which also include the trading firm Getco, and Stifel, Nicolaus & Company, a financial services company -- would receive securities that give them the right to buy new shares in Knight at a price of roughly $1.50 each, these people said.

Knight Capital Group Inc looks set to enter into a $400 million financing deal with a group of investors, allowing the trading firm to open its doors Monday after a crippling $440 million loss, although it will come at a steep cost to shareholders, sources familiar with the situation said. Such a deal would help Knight continue to operate and avoid further disruption and uncertainty for its brokerage clients, which include firms such as TD Ameritrade, Vanguard and Fidelity Investments. 

 

Knight Capital confirmed on Monday that it struck a $400 million rescue deal with a group of investors, staving off collapse after a recent trading mishap, even as the New York Stock Exchange temporarily revoked the firm's market making responsibilities. 

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