Sunday, August 5, 2012

Knight Capital to raise $400 million report

Trading execution firm raising cash after near-fatal glitch

Portfolio Relevance
By Steve Gelsi, MarketWatch

A trader works at the Knight Capital kiosk on the floor of the New York Stock Exchange.
NEW YORK (MarketWatch) — Knight Capital Group Inc. is close to winning a $400 million infusion from Chicago market maker Getgo and TD Ameritrade among others, as the stock-trading firm scrambles to raise cash in the wake of a painful technology glitch last week, according to reports on Sunday.
KCG 4.05+1.47+56.98%
Knight Capital KCG +56.98% is finalizing plans to sell convertible bonds that would change from debt into stock, although specific terms of the deal haven’t been set, according to a report by CNBC.
The conversion price for the bonds would likely be below Knight’s closing price of $4.05 a share on Friday, according to the CNBC report.
TD Ameritrade Holding Corp.AMTD +4.55% and Getgo are among a group of about six prospective investors in Knight Capital, said CNBC, which cited unnamed people involved with the deal.
Knight has been moving quickly to raise emergency capital after $440 million in losses were accidentally generated from faulty stock transactions last week.
Hedge fund Citadel LLC and private-equity firm KKR & Co. KKR +0.86% have chosen not to invest in Knight Capital, Bloomberg reported.
Knight Capital shares rebounded 57% on Friday after TD Ameritrade said it would again route client trades to Knight. The stock fell sharply on Wednesday and Thursday. 
Steve Gelsi is a reporter for MarketWatch in New York.

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