Trading
firm and market maker Knight Capital Group Inc.(NYSE:KCG) has estimated the losses from Wednesday's
technical glitch that led to unusual trades in some 140 stocks, at $440
million,
Shares
of the company shaved off about half their value in early trades on Wall
Street. It was trading down 45 percent at $3.84 at 9.52 a.m. having fallen
about 33 percent on the previous day.
The
company continued its trading and market making activities even as it said that
it would look at other alternatives especially with regard to shoring up its
capital base.
Should Investors Buy KGC Now? Get Trend Analysis
A
problem with its trading software resulted in numerous orders being places at
wildly fluctuating prices, sending some stocks skyrocketing while others
nose-dived.
“Although
the company’s capital base has been severely impacted, the company’s
broker/dealer subsidiaries are in full compliance with their net capital
requirements,” Knight said. “The company is actively pursuing its strategic and
financing alternatives to strengthen its capital base.”
The
estimated loss is several times higher than the $115.2 million net income
reported by the company in 2011, on revenue of $1.4 billion.
The
NYSE has cancelled the trades in those stocks which saw a price swing of 30
percent either way in the initial 45 minutes of trade.
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