Knight Capital Group Inc.(NYSE:KCG) shares rose over 10% in the pre-open session as the company is presently in discussion with at least two companies on the possible sale of its largest business unit. It is well capitalized and would only proceed with a deal if it generated profit for its investors and clients, as told by Knight’s Chief executive in an internal memo.
The electronic trading company has been approached by competitors Virtu Financial LLC and Getco LLC about its market making operation that makes use of market models to match purchase and sell order in stocks and options, carrying out around 10% of US volume, as told by sources familiar with the discussions.
CEO of Knight, Tom Joyce has mentioned in a note to his workers on Saturday that the board of directors and management crew are regularly considering grounds that are potentially promising or collaborative to enhance investor value and enhance company’s offering to its customers.
Knight was compelled to take on new shareholders after a software malfunction took place on 1st August, letting loose a plethora of orders to the New York Stock Exchange. This led to Knight losing out in an enormous portion that nearly bankrupted the company.
It was in October when Knight had posted a third quarter loss amounting to $389.9 million. However, Joyce said that the company was better capitalized than it was before the glitch had taken place. He had reiterated this factor in the note to employees.
He said that given the recapitalization, speedy client re-engagement and recoil in trade volumes, there is no need for Knight to proceed with any agreement, transaction or enterprise. The company would only step forward with such a step if it makes strategic sense for investors and its business.
Spokespeople for Virtu and Getco have refused to comment on the reports.
Apart from being a leading US marker maker, Knight operates bond and foreign exchange trading platforms.