Trading
firm and market maker Knight Capital Group Inc.(NYSE:KCG) staged a comeback
rally on Friday on a report that it has told brokers on Friday morning that it
had got a line of credit allowing it to operate for the day.
Shares
recovered more than 8percent on Friday and were trading at $3.31 in late morning
trades..
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The
Wall Street Journal carried a report on the line of credit, quoting sources
but said details such as the source of the credit and the terms of financing
were not available.
It
said Knight Capital did not immediately respond to request for comments.
Knight
Capital shares fell more than 60 percent on Thursday and 33% on Wednesday, a
day after a technical glitch in its trading software caused a deluge of
unnatural trades through its system causing a loss of $400 million to the firm.
The
company immediately went into damage mode and asked many of its clients to look
at other alternatives to place their trades. Some firms like Citibank and
Ameritrade have suspended routing their trades through the company.
Knight
Capital has already said that it is looking at strategic and financial
alternatives to keep its operations running.
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Report On Recent
Turn Around
Some
analysts have created a potential bankruptcy scare if the firm was unable to
get adequate financing in time though analysts and other stakeholders are
reassuring investors on the credit worthiness of the company.
Knight Capital earnings in 2011 were
of the order of $115.2 million, nearly a fourth of the losses it suffered from
Wednesday’s trading mess.
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