It will be interesting to see if Knight can survive as an independent entity:
Knight Capital: Trading Error Cost Firm $440 Million
By Paul Vigna
Wall Street Journal
August 2, 2012, 8:21 AM
Knight Capital just disclosed a pretax loss of $440 million due to yesterday’s trading error. Shares are down 42% at $4.02 in premarket trading, on top of yesterday’s 33% slide.
Here’s the press release:
PRESS RELEASE: Knight Capital Group Provides Update Regarding August 1st Disruption To Routing In NYSE-listed Securities
JERSEY CITY, N.J., Aug. 2, 2012 /PRNewswire/ — Knight Capital Group, Inc. (NYSE Euronext: KCG) today provided an update on the August 1, 2012 disruption to routing in NYSE-listed securities.
As previously disclosed, Knight experienced a technology issue at the open of trading at the NYSE yesterday, August 1st. This issue was related to Knight’s installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market. This software has been removed from the company’s systems.
Clients were not negatively affected by the erroneous orders, and the software issue was limited to the routing of certain listed stocks to NYSE.
Knight has traded out of its entire erroneous trade position, which has resulted in a realized pre-tax loss of approximately $440 million. Although the company’s capital base has been severely impacted, the company’s broker/dealer subsidiaries are in full compliance with their net capital requirements. Knight will continue its trading and market making activities at the commencement of trading today. The company is actively pursuing its strategic and financing alternatives to strengthen its capital base.
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