Trading firm Knight Capital is being forced to raise money after an erroneous trading position wiped out $440 million of the firm’s capital, Knight said in a statement on Thursday.
Problems at Knight Capital Group Inc, one of the largest firms that buys and sells stocks to provide liquidity to the markets, emerged at the beginning of trading on Wednesday.
“The company is actively pursuing its strategic and financing alternatives to strengthen its capital base,” Knight said in the statement. Its shares fell 56.8 percent to $3 in pre-market trading.
The firm said its broker/dealer divisions would open for business as usual on Thursday, adding that despite the impact of the trading loss it was in compliance with capital requirements. It also said it had traded out of the entire position.
Wednesday’s technology breakdown roiled the prices of 140 stocks listed on the New York Stock Exchange, undermining fragile investor confidence in the stability of U.S. stock markets.
Anyone with capital there? GET IT OUT PRONT – remember MF Global & Worldspreads?