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Author Topic: KCG - KCG Holdings, Inc. - NYSE  (Read 4458 times)
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Anthony
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« on: August 01, 2012, 08:12:36 PM »


Daily Chart:  http://stockcharts.com/h-sc/ui?s=KCG&p=D&b=5&g=0&id=p75492562998

Weekly Chart:  http://stockcharts.com/h-sc/ui?s=KCG&p=W&b=5&g=0&id=p56347190548

News:  http://finance.yahoo.com/q/h?s=KCG+Headlines

Business Summary:  Knight Capital Group, Inc. (Knight) is a global financial services firm that provides access to the capital markets across multiple asset classes to a network of clients, including buy- and sell-side firms and corporations. The Company operates in four segments: Market Making, Institutional Sales and Trading, Electronic Execution Services, and Corporate and Other. Its Market Making segment principally consists of market making in global equities and listed domestic options. Its Institutional Sales and Trading segment includes global equity and fixed income sales, reverse mortgage origination and securitization, capital markets and asset management activities. The Company's Electronic Execution Services segment offers access to markets and self-directed trading via its electronic agency-based platforms. The Corporate and Other segment houses functions that support its other segments. In June 2012, Knight acquired certain assets and liabilities of Penson Futures...
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Anthony
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« Reply #1 on: August 01, 2012, 08:33:26 PM »

"Shares of Knight Capital Group Inc. sink 33% on Wednesday after the New Jersey-based firm says that its market-making unit suffered “a technology issue” that affected the routing of around 150 stocks on the New York Stock Exchange."

Might be a good rebound play if they identify and repair the trading glitch that tanked their PPS.
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Sloth
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« Reply #2 on: August 02, 2012, 03:23:01 PM »

I just saw the story on CNBC and will be interesting to see the bounce.
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Anthony
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« Reply #3 on: August 02, 2012, 04:22:31 PM »

Wow,this thing is got hammered today!! Tried to buy some A/H shares today @$1.87 but I wasn't fast enough before it started to come back up.(might of been a good thing) My bid is still there though,we'll see what happens.
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« Reply #4 on: August 03, 2012, 07:07:35 AM »

Didn't get filled last night,trying again @ $1.95 in premarket. Not going to chase the ask,it may go lower when the market opens? Thats a pretty nice gap to get filled,if it does.
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Anthony
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« Reply #5 on: August 03, 2012, 07:46:09 AM »

Anyone interested in buying this needs to read the link below.


http://ih.advfn.com/p.php?pid=nmona&article=53696299
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Anthony
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« Reply #6 on: August 03, 2012, 09:34:32 AM »

Looks like I should of chased,so far +30%. Oh well,lets see if it holds.
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Anthony
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« Reply #7 on: August 03, 2012, 02:58:49 PM »

I snoozed,I losed!! Dagnabit!!

Goldman Sachs Group Inc. (GS) helped Knight Capital Group Inc. (KCG) unwind its unintended stock purchases late Wednesday, buying Knight's unwanted positions in one block sale, CNBC reported, citing people familiar with the matter.
Goldman charged $440 million for the transaction, the people said.
CNBC reported that Knight has three business days to settle.
In a statement early Thursday, Knight said it had "traded out of its entire erroneous trade position, which has resulted in a realized pre-tax loss of approximately $440 million."
The New York Times reported Friday that Knight is in discussions for a potential sale of its futures brokerage unit with R.J. O'Brien and other potential buyers, citing people briefed on the matter.
The Times report also mentioned Peak6 as a potential buyer of Knight assets.
Full story at http://www.cnbc.com/id/48489000 and http://dealbook.nytimes.com/2012/08/03/knight-said-to-hold-talks-to-sell-futures-brokerage-unit/
Write to nymonitoring@dowjones.com
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Jack
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« Reply #8 on: August 06, 2012, 07:38:01 AM »

KCG to get #400M at $1.50 convert pref shrs

Knight getting costly $400 million lifeline after trading debacle
By John McCrank and Carrick Mollenkamp | Reuters – 15 mins ago..

NEW YORK (Reuters) - Knight Capital Group Inc looks set to enter into a $400 million financing deal with a group of investors, allowing the trading firm to open its doors Monday after a crippling $440 million loss, although it will come at a steep cost to shareholders, sources familiar with the situation said.

Such a deal would help Knight continue to operate and avoid further disruption and uncertainty for its brokerage clients, which include firms such as TD Ameritrade , Vanguard and Fidelity Investments.

An announcement on the deal is expected by early Monday, one source said.

Knight's shareholders have had to pay a steep price to keep the firm afloat following 45 minutes of software-induced mayhem last Wednesday that led to the loss and a massive decline in customer confidence. Shares worth $10.33 last Tuesday night may now be worth just $1.50, an 85 percent drop.

The capital lifeline is coming from investors that include private equity firm Blackstone Group, Chicago market-maker Getco - in which private equity firm General Atlantic is a shareholder - as well as financial services firms TD Ameritrade , Stifel Nicolas, Jefferies Group Inc and Stephens Inc, according to the sources.

The investment is expected to be made through convertible preferred stock, which will have a conversion price of $1.50 per share and carry a coupon of 2 percent, the sources said. The consortium will own 70 percent to 75 percent of Knight following the conversion, one source said.

Officials at Knight, Blackstone, TD Ameritrade , Jefferies, Stifel and General Atlantic declined to comment. Officials at Getco and Stephens were not immediately available for comment. CNBC earlier reported the news of the deal.

Knight's problems started early on Wednesday when a software glitch flooded the New York Stock Exchange with unintended orders for dozens of stocks, boosting some shares by more than 100 percent and leaving the company with the trading loss.

As the nation's largest provider of retail market-making in New York Stock Exchange and Nasdaq-listed stocks, Knight buys and sells shares for clients. It also provides liquidity to the equity market by stepping in to buy and sell using its own capital to ensure orderly, smooth activity.

CIRCUIT BREAKERS TRIGGERED

Knight's computers had been loaded with new software Tuesday that was designed to accommodate a change on the NYSE, according to people familiar with the matter. When trading began at 9:30, however, the computers poured a huge number of orders into the market.

For about 10 minutes it was unclear where the orders were originating, according to people familiar with the matter. After NYSE officials identified Knight as the source, it took another 10 minutes for the company to figure out the source of the problem. By that time, the erratic orders in a number of affected stocks had triggered exchange "circuit breakers" that temporarily halt trading in volatile stocks.

At Knight's headquarters in Jersey City, N.J., senior officials streamed down to the trading floor and sought to halt the trading, according to people familiar with the situation.

The firm's CEO was not among them. Long-time Wall Street veteran Thomas Joyce, known in the business as "T.J.," had undergone knee surgery the day before.

In his absence that morning things spun out of control and it took until 10 a.m., 30 minutes after trading on the exchange opened, for Knight and the NYSE to stop the order flow.

Joyce hobbled to the trading floor on crutches around noon and stayed for about 15 minutes, assuring people that everything would be fine.

By that time, the damage had been done. A number of major trading partners were shifting their orders to other firms, drastically reducing the volume at Knight.

For example, through Tuesday, Knight accounted for 20 percent of the market-making activity in shares of Apple, one of the most actively traded stocks on a daily basis. By midday on Friday, Knight was the market maker for just 2 percent of the share volume, according to data from Thomson Reuters Autex, though market makers may not be reporting all trade data.

While Knight's closure would not disrupt trading since big clients have routed orders to other firms, its demise could further shake investor confidence in the market.

Knight's troubles also highlight how vulnerable market makers are to the complex web of computers and software that constitute the modern marketplace. For investors already suspicious that the system might be fundamentally broken after the "Flash Crash" of 2010 and the botched Facebook IPO in May, the troubles at Knight have only added to concerns.

"HANDCUFFED TO KNIGHT"

TD Ameritrade , the No.1 U.S. brokerage by trading volume, has exclusive clearing deals with Knight and it would be in its best interests to keep the embattled equities trader afloat.

Two months ago, Knight bought the futures business of Penson Worldwide for $5 million. TD Ameritrade exclusively clears its clients' futures and forex trades through that platform. The Omaha, Nebraska-based brokerage's entire bond platform is also with Knight.

"They really are handcuffed to Knight," a source with knowledge of TD Ameritrade 's arrangements with Knight said.

Getco was founded in 1999 by two Chicago traders and is also an electronic trading firm that matches buyers and sellers in fractions of a second.

CEO Daniel Coleman is a proponent of high-speed trading technology, touting the belief that it allows investors access to liquid markets at a lower cost. In June, Coleman told a Congressional panel that market makers like Getco "reduce market volatility by buying when others want to sell and selling when others want to buy."

REGULATORS, INVESTORS SHOW CONCERN

Even if Knight receives the capital injection, it will have to persuade clients to resume trading with it and identify the reasons behind the software glitch.

Customers including TD Ameritrade and Scottrade said on Friday they would return business to Knight, the nation's largest retail market maker of U.S. stocks. Others, including Vanguard, said they were not trading with the company yet.

Knight also could face litigation from shareholders who have seen the value of their holdings plummet.

The potential liability could increase if it were found that Knight violated any market rules. The top U.S. securities regulator said on Friday that government lawyers were trying to determine if Knight violated a new rule designed to protect the markets from rogue algorithmic computer trading programs.

The Securities and Exchange Commission's market access rule, which took effect last year, requires brokers to put in place risk control systems to prevent the execution of erroneous trades or orders that exceed preset credit or capital thresholds.

Such concerns kept some potential investors on the sidelines over the weekend. Several private equity firms that are usually active in the sector decided against entering the fray as they feared they lacked sufficient time to perform due diligence on those issues, according to sources close to some of the firms.

Bank of America Corp was among the banks that looked at Knight, but was not a likely candidate for a deal, a source familiar with matter said. Bank of America officials declined to comment.

Some online foreign-exchange trading firms also looked into the possibility of buying Knight's Hotspot FX unit, but it was unclear whether Knight explored that avenue, a source familiar with those discussions said. Knight had also been in talks with restructuring lawyers as it tried to keep its options open, another source said.

(Additional reporting by Edward Krudy, Jessica Toonkel, Nick Brown, Angela Moon, Greg Roumeliotis and Rick Rothacker; Writing by Katya Wachtel; Editing by Paritosh Bansal, Matt Driskill)
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Anthony
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« Reply #9 on: August 06, 2012, 12:25:12 PM »

KCG to get #400M at $1.50 convert pref shrs

Knight getting costly $400 million lifeline after trading debacle
By John McCrank and Carrick Mollenkamp | Reuters – 15 mins ago..

NEW YORK (Reuters) - Knight Capital Group Inc looks set to enter into a $400 million financing deal with a group of investors, allowing the trading firm to open its doors Monday after a crippling $440 million loss, although it will come at a steep cost to shareholders, sources familiar with the situation said.

Such a deal would help Knight continue to operate and avoid further disruption and uncertainty for its brokerage clients, which include firms such as TD Ameritrade , Vanguard and Fidelity Investments.

An announcement on the deal is expected by early Monday, one source said.

Knight's shareholders have had to pay a steep price to keep the firm afloat following 45 minutes of software-induced mayhem last Wednesday that led to the loss and a massive decline in customer confidence. Shares worth $10.33 last Tuesday night may now be worth just $1.50, an 85 percent drop.

The capital lifeline is coming from investors that include private equity firm Blackstone Group, Chicago market-maker Getco - in which private equity firm General Atlantic is a shareholder - as well as financial services firms TD Ameritrade , Stifel Nicolas, Jefferies Group Inc and Stephens Inc, according to the sources.

The investment is expected to be made through convertible preferred stock, which will have a conversion price of $1.50 per share and carry a coupon of 2 percent, the sources said. The consortium will own 70 percent to 75 percent of Knight following the conversion, one source said.

Officials at Knight, Blackstone, TD Ameritrade , Jefferies, Stifel and General Atlantic declined to comment. Officials at Getco and Stephens were not immediately available for comment. CNBC earlier reported the news of the deal.

Knight's problems started early on Wednesday when a software glitch flooded the New York Stock Exchange with unintended orders for dozens of stocks, boosting some shares by more than 100 percent and leaving the company with the trading loss.

As the nation's largest provider of retail market-making in New York Stock Exchange and Nasdaq-listed stocks, Knight buys and sells shares for clients. It also provides liquidity to the equity market by stepping in to buy and sell using its own capital to ensure orderly, smooth activity.

CIRCUIT BREAKERS TRIGGERED

Knight's computers had been loaded with new software Tuesday that was designed to accommodate a change on the NYSE, according to people familiar with the matter. When trading began at 9:30, however, the computers poured a huge number of orders into the market.

For about 10 minutes it was unclear where the orders were originating, according to people familiar with the matter. After NYSE officials identified Knight as the source, it took another 10 minutes for the company to figure out the source of the problem. By that time, the erratic orders in a number of affected stocks had triggered exchange "circuit breakers" that temporarily halt trading in volatile stocks.

At Knight's headquarters in Jersey City, N.J., senior officials streamed down to the trading floor and sought to halt the trading, according to people familiar with the situation.

The firm's CEO was not among them. Long-time Wall Street veteran Thomas Joyce, known in the business as "T.J.," had undergone knee surgery the day before.

In his absence that morning things spun out of control and it took until 10 a.m., 30 minutes after trading on the exchange opened, for Knight and the NYSE to stop the order flow.

Joyce hobbled to the trading floor on crutches around noon and stayed for about 15 minutes, assuring people that everything would be fine.

By that time, the damage had been done. A number of major trading partners were shifting their orders to other firms, drastically reducing the volume at Knight.

For example, through Tuesday, Knight accounted for 20 percent of the market-making activity in shares of Apple, one of the most actively traded stocks on a daily basis. By midday on Friday, Knight was the market maker for just 2 percent of the share volume, according to data from Thomson Reuters Autex, though market makers may not be reporting all trade data.

While Knight's closure would not disrupt trading since big clients have routed orders to other firms, its demise could further shake investor confidence in the market.

Knight's troubles also highlight how vulnerable market makers are to the complex web of computers and software that constitute the modern marketplace. For investors already suspicious that the system might be fundamentally broken after the "Flash Crash" of 2010 and the botched Facebook IPO in May, the troubles at Knight have only added to concerns.

"HANDCUFFED TO KNIGHT"

TD Ameritrade , the No.1 U.S. brokerage by trading volume, has exclusive clearing deals with Knight and it would be in its best interests to keep the embattled equities trader afloat.

Two months ago, Knight bought the futures business of Penson Worldwide for $5 million. TD Ameritrade exclusively clears its clients' futures and forex trades through that platform. The Omaha, Nebraska-based brokerage's entire bond platform is also with Knight.

"They really are handcuffed to Knight," a source with knowledge of TD Ameritrade 's arrangements with Knight said.

Getco was founded in 1999 by two Chicago traders and is also an electronic trading firm that matches buyers and sellers in fractions of a second.

CEO Daniel Coleman is a proponent of high-speed trading technology, touting the belief that it allows investors access to liquid markets at a lower cost. In June, Coleman told a Congressional panel that market makers like Getco "reduce market volatility by buying when others want to sell and selling when others want to buy."

REGULATORS, INVESTORS SHOW CONCERN

Even if Knight receives the capital injection, it will have to persuade clients to resume trading with it and identify the reasons behind the software glitch.

Customers including TD Ameritrade and Scottrade said on Friday they would return business to Knight, the nation's largest retail market maker of U.S. stocks. Others, including Vanguard, said they were not trading with the company yet.

Knight also could face litigation from shareholders who have seen the value of their holdings plummet.

The potential liability could increase if it were found that Knight violated any market rules. The top U.S. securities regulator said on Friday that government lawyers were trying to determine if Knight violated a new rule designed to protect the markets from rogue algorithmic computer trading programs.

The Securities and Exchange Commission's market access rule, which took effect last year, requires brokers to put in place risk control systems to prevent the execution of erroneous trades or orders that exceed preset credit or capital thresholds.

Such concerns kept some potential investors on the sidelines over the weekend. Several private equity firms that are usually active in the sector decided against entering the fray as they feared they lacked sufficient time to perform due diligence on those issues, according to sources close to some of the firms.

Bank of America Corp was among the banks that looked at Knight, but was not a likely candidate for a deal, a source familiar with matter said. Bank of America officials declined to comment.

Some online foreign-exchange trading firms also looked into the possibility of buying Knight's Hotspot FX unit, but it was unclear whether Knight explored that avenue, a source familiar with those discussions said. Knight had also been in talks with restructuring lawyers as it tried to keep its options open, another source said.

(Additional reporting by Edward Krudy, Jessica Toonkel, Nick Brown, Angela Moon, Greg Roumeliotis and Rick Rothacker; Writing by Katya Wachtel; Editing by Paritosh Bansal, Matt Driskill)


Can't beleive this is still over $3.00 with that news. They must be their own market maker.LOL
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justonian
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« Reply #10 on: August 06, 2012, 03:19:25 PM »

That's a scary chart.  Looks like they forgot the pump and skipped to the dump.
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Kapla
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« Reply #11 on: August 06, 2012, 08:53:19 PM »

Chatter about todays 8K that might have them getting the stock over 4.50 and keeping it there for a while.  They can't sell shares for at least 60 days.

http://sec.gov/Archives/edgar/data/1060749/000119312512338098/d392396d8k.htm

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Stretcher75
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Have an entry / exit strategy and you will be fine


« Reply #12 on: September 12, 2012, 10:42:39 AM »

Any thoughts here for this chart for this POS?
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Dr PennyStock
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« Reply #13 on: September 21, 2012, 11:48:01 AM »

Any thoughts here for this chart for this POS?

Looks like it will trade sideways for a few months.
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Dr PennyStock
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Have an entry / exit strategy and you will be fine


« Reply #14 on: September 26, 2012, 11:52:42 AM »

Figures, this POS is moving today in a red market
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