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  • Trade Alert: Knight Capital Stock Downgrade 3 comments
    Aug 6, 2012 12:57 AM | about stocks: KCG

    Trade Alert: Knight Capital Stock Downgrade

    Professional Traders Reference worldwide since 2003

    Trade Alert: Knight Capital (NYSE:KCG) stock downgrade. For more information refer to Vieira's Greatest Trades Ever: Knight Capital Flash Crash (search for link)

    Knight Capital Group Inc looked set on Sunday to receive a $400 million capital injection from a group of investors, as it sought a rescue deal to avoid bankruptcy after a crippling $440 million loss, two sources familiar with the situation said.

    The investors include private equity firms Blackstone Group and General Atlantic, which owns a stake in Chicago market-maker Getco, as well as brokerages TD Ameritrade and Stifel Nicolas, according to the sources.

    The new investors may buy convertible preferred securities, that is, bond-like equity with an option to change to a set number of common shares at an established price and at an exercise date in the future. Knight's buyers of preferred would have the right to purchase about 270 million shares of Knight common stock at $1.50 a share.

    On Friday, Knight's shares closed at $4, down from $12 two week ago. The equity infusion could dilute existing common shareholders by perhaps 60%, but Knight's viability as an on-going concern is questionable without it. The preferred securities deal could give Knight sufficient capital to open on Monday for trading.

    Beyond Trading downgrades Knight Capital (KCG) stock from Strong Sell to Junk

    One more bailout in Wall Street. A shameless game. An insider's job. Say bye bye to your money shareholders!

    Goldman Sachs (NYSE:GS) may be a major beneficiary of the Knight turmoil. Goldman would pick up Knight's inventory at fire sale prices without having to take on the risk of equity ownership in the exchange trader.

    Vieira, world best stock trader, comments on the deal

    Congratulations to short sellers and Goldman Sachs. If share price opens tomorrow between $2.5-2.9 it is a clear full bailout.

    Stocks: KCG
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Comments (3)
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  • qtakerh
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    Comment (1) | Send Message
     
    Which way will the stock price move tomorrow with the news of dilution?
    6 Aug 2012, 12:20 AM Reply Like
  • Vieira Trading
    , contributor
    Comments (133) | Send Message
     
    Author’s reply » Beyond Trading downgrades Knight Capital (KCG) stock from Strong Sell to Junk
    6 Aug 2012, 12:32 AM Reply Like
  • Vieira Trading
    , contributor
    Comments (133) | Send Message
     
    Author’s reply » Vieira, comments on the deal

     

    Congratulations to short sellers and Goldman Sachs. If share price opens tomorrow between $2.5-2.9 it is a clear full bailout.
    6 Aug 2012, 12:57 AM Reply Like
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