Knight Capital Gets Confidence Booster, Shares Up 60%
Photo by Spencer Platt/Getty ImagesAfter watching its share price collapse following some nasty trading errors, Knight Capital Group Inc. (NYSE: KCG) got a huge bounce this afternoon when TD Ameritrade Holding Corp. (NYSE: AMTD) resumed routing trades through Knight. The…
After watching its share price collapse following some nasty trading errors, Knight Capital Group Inc. (NYSE: KCG) got a huge bounce this afternoon when TD Ameritrade Holding Corp. (NYSE: AMTD) resumed routing trades through Knight. The vote of confidence was probably as good as an infusion of a several million dollars.
Earlier today The Wall Street Journal reported that the company had received a credit line that would allow it to operate for the day, and that boosted the stock nearly halfway to its 60% gain. But there’s little doubt that without TD Ameritrade’s vote of confidence the share price would have stalled out at a much lower level.
Scottrade has also resumed trading with Knight, although E*Trade Financial Corp. (NASDAQ: ETFC), Vangaurd, and Fidelity have not. Knight said yesterday that it estimated its cost from the errors at $440 million, which we noted this morning is about 4x the company’s annual net income.
Knight’s shares are now trading at $4.13 in a 52-week range of $2.27-$14.00. Shares closed at $2.58 last night.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
