Knight Capital Trades Higher on M&A Rumors
Knight Capital, parent of ECN venue Hotspot FX is trading higher by 7.5% this morning to $2.70 on weekend rumors that the firm is in play. According to reports from the Wall Street Journal and Bloomberg, suitors are eyeing either a purchase of Knight’s equity market making unit or the entire company. Rumored buyers include Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term Getco, a participant of Knight Capital’s $400 million financing in August after a trading glitch send the firm nearly to Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term, and Virtu Financial. At the time, shares of the company fell to a low of $2.24 from above $10 a share. However, even after being rescued, due to the heavily dilutive financing that Knight received, shares have continued to trade below $3.00.
The current bidding isn’t that surprising, given the ownership control that Knight Capital investors lost during the company’s financing. With Getco already owning 15% of Knight, the suspense now is what it would take for a rival market maker to enter a winning bid. Also, it remains to be seen if a buyer concentrated in the equity market would look to sell off the Hotspot FX unit, integrate it within an existing business or keep it as a standalone group. At the time of the August glitch, Hotspot was viewed as a strong asset and was rumored to be on the block to be sold to save the rest of Knight Capital. However, since then, the ECN has lost market share during the drop in trading activity over the second half of 2012.
Knight Capital, parent of ECN venue Hotspot FX is trading higher by 7.5% this morning to $2.70 on weekend rumors that the firm is in play. According to reports from the Wall Street Journal and Bloomberg, suitors are eyeing either a purchase of Knight’s equity market making unit or the entire company. Rumored buyers include Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term Getco, a participant of Knight Capital’s $400 million financing in August after a trading glitch send the firm nearly to Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term, and Virtu Financial. At the time, shares of the company fell to a low of $2.24 from above $10 a share. However, even after being rescued, due to the heavily dilutive financing that Knight received, shares have continued to trade below $3.00.
The current bidding isn’t that surprising, given the ownership control that Knight Capital investors lost during the company’s financing. With Getco already owning 15% of Knight, the suspense now is what it would take for a rival market maker to enter a winning bid. Also, it remains to be seen if a buyer concentrated in the equity market would look to sell off the Hotspot FX unit, integrate it within an existing business or keep it as a standalone group. At the time of the August glitch, Hotspot was viewed as a strong asset and was rumored to be on the block to be sold to save the rest of Knight Capital. However, since then, the ECN has lost market share during the drop in trading activity over the second half of 2012.