Banking & Finance

Knight Capital Gets Confidence Booster, Shares Up 60%

Source: Photo by Spencer Platt/Getty Images
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