After experiencing a technical glitch with its trading software Wednesday, Knight Capital Group (NYSE: KCG), owner of Urban Financial announced it had lost $440 million due to the errors. The company’s stock price plunged 70% over two days, effectively leaving the company momentarily insolvent.
Company executives told Bloomberg News that Knight is looking into financing assistance from outside companies, but has not announced any agreement as of noon Thursday.
“The company is actively pursuing its strategic and financing alternatives to strengthen its capital base,” Knight said in a statement.
Knight’s share price fell as low as $3.15 as a result of the losses, down from more than $10 Tuesday.
Fox Business reported that Knight had approached J.P. Morgan Chase for assistance with speculation of other companies including
“We believe Knight Capital is at risk of bankruptcy following the loss and so we are lowering our rating to sell,” wrote analyst Robert Rutschow with CLSA Credit Agricole Securities in a note Thursday, as reported by Bloomberg News. “The company’s best option at this point is a sale.”
Knight Chairman and CEO Tom Joyce granted an interview with Bloomberg News where he discusses the glitch in more detail. View the video.
Written by Elizabeth Ecker
