KnightCapital has secured a $400m infusion that will help the firm stave off financialruin following last week’s costly trading mishap.
The Jersey City, New Jersey-basedbrokerage on Monday said the lifeline, which was conceived and structured byJefferies Group, is backed by Blackstone, Getco, Stephens, Stifel Financial andTD Ameritrade.
The transaction includes two-percent preferredshares that can be converted to common stock at $1.50 a piece, afraction of the premium investors paid prior to the software glitch that fuelleda flood of erroneous trades and subsequent $440m loss forecast.
The tentative deal will give some participantsaccess to three new seats on Knight’s board of directors and must be sealedbefore the New York Stock Exchange reinstates its market-making responsibilities,which have been temporarily assigned to Getco, according to securities filings.
Knight’s stock plummeted 25.45% to $3.02in early trading in response to concerns about dilution of existingshareholders as the rescue committee is poised to seize approximately 267million shares, which will amount to a stake of more than 70% when the smokeclears.
As TradeWinds has reported, NordicAmerican Tankers was one nearly 150 New York-listed companies impacted by the glitch,which prompted concerns about whether the firm’s trading and underwritingactivities in the shipping sphere would be impacted by the fallout.
Check out the links and fact boxes to theright of this article to read more about Knight and Blackstone and their ties tothe maritime shipping industry
