KCG down due to rumor of algo gone wild

Discussion in 'Stocks' started by m22au, Aug 1, 2012.

  1. m22au

    m22au

    http://www.cnbc.com/id/48516238

    Knight Capital Group has been saved with an infusion of $400 million in the form of a convertible preferred security that gives the buyers the right to buy Knight shares at $1.50, according to sources close to the deal.

    The private-equity firm of General Atlantic (which owns the Getco market maker) along with Blackstone private equity, Omaha brokerage firm TD Ameritrade [AMTD Loading... () ], and Stifel Nicolas will buy the $400 million preferred, which has a conversion price of $1.50.

    The four buyers of the preferred will together own about 70 percent of the firm, which upon conversion of the preferred, will see its share count rise from a hundred million shares to roughly 350 million shares. The coupon on the preferred is 2 percent, but all the firms are expected to convert after 10 business days.
     
    #161     Aug 5, 2012
  2. newwurldmn

    newwurldmn

    So $2-3 dollars/share (700-1Bn market cap) is what we should expect on monday...
     
    #162     Aug 5, 2012
  3. GTS

    GTS

    Halted since 8:07am ?
     
    #163     Aug 6, 2012
  4. m22au

    m22au

  5. @ETr's - great replies in thread

    KCG was 10$ and if you give it a 70% haircut ... you get 3$.

    I wonder if we'll get 3+3.50$ strikes tomorrow ... I see them on eOptions platform, but not traded yet.
     
    #165     Aug 6, 2012