Knight CEO plays down deal talk
November 26, 2012 6:42 AM EST
Knight Capital Group
The electronic trading firm has been approached by rivals Getco LLC and Virtu Financial LLC about its market-making operation, which uses computer models to match buy and sell orders in stocks and options, executing around 10 percent of U.S. volume, according to people familiar with the talks.
"To that end, our board of directors and management team regularly consider opportunities that are potentially strategic or collaborative in nature to enhance shareholder value and improve our offering to clients," Knight CEO Tom Joyce said in a note to employees on Saturday, seen by Reuters. The talks were first reported by the Wall Street Journal.
Knight was forced to take on new investors following a software glitch on August 1 that unleashed a flood of orders to the New York Stock Exchange, resulting in a massive position Knight had to unload at a loss, nearly bankrupting the firm.
In October, Knight posted a third-quarter loss of $389.9 million. But Joyce said the company was better capitalized than it was before the glitch - a point he reiterated in the memo to employees.
"Given our recapitalization, rapid client re-engagement and rebound in trade volumes, there is no need for Knight to pursue a partnership, transaction or any other undertaking," he said. "We would only move forward with such an initiative if it makes strategic sense for our shareholders and our business."
Getco and Virtu spokespeople have declined comment on the reports.
Getco was one of the firms involved in the $400 million rescue of Knight in August, led by Jefferies Group
As part of the deal, Getco investor General Atlantic, as well as Blackstone and TD Ameritrade, were given seats on Knight's board.
Aside from being a top U.S. market maker, Knight runs bond and foreign exchange trading platforms and owns a reverse mortgage lender. It also holds a stake of about 20 percent in Direct Edge, the No. 4 U.S. cash equities exchange.
(Reporting By John McCrank; Editing by Theodore d'Afflisio)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Russia Is Ready for Shooting War, Will Likely Win Looming Nuclear Showdown with U.S. – Report
- Kobani ISIS Fighter Sends Out Desperate Message For Prayers And Support: Euphoria Turns Into Desperation As Kurds Advance
- Chris Algieri’s Battered Face Trends On Social Media
- Home Depot Early Black Friday 2014 Sale Up To Nov. 29, 2014 Includes Special Buys On Appliances Such As Samsung Refrigerators, Whirlpool Electric Ranges And Hoover Vacuum Cleaners
- Microsoft Band Runs Out Of Stock, But Offers $10 Gift Voucher To Wait-Listed Customers
- Black Friday Sale 2014 Deals From Amazon On Smartphones, TVs, Headsets And More
- ISIS War: US Airstrikes Lead to Growing ISIS Support In Syria; Russia Questions Coalition's Policies