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Knight Capital Should Trade at $2.17-$2.47/Shr, BTIG Says I'm on the lower end of this but its correct price is certainly not where it is right now on the pre-market

In a rational world you are correct, I'm afraid people aren't so rational sometimes and they put discounts in things like that

"Going Concern On August 1, 2012, at the open of trading at the NYSE, the Company experienced a technology issue related to its installation of trading software which resulted in the Company sending numerous erroneous orders in NYSE-listed securities into the market. The Company has traded out...

8-K filled today http://www.knight.com/investorRelations/secFiling.asp Investors have no obligation to convert preferred. They might way to suck some dividends out of the company before they convert

You should be delta hedging in the pre-market. $3 was a gift for those who wanted out

I think the right number of shares outstanding might be 355. Option compensation might not be exercisable anymore

Last 2 times there was bad news on the stock, it sold off the whole day and closed at lows

So how much is KCG is worth now? I believe a better question is how much will the market value KCG next week. Its a guessing game but using information and market experience these guesses can have positive expectancy Company was worth $1B before debacle, so we know where the ceiling is, its...

This is not a threat in small offering but here the offering is so huge it could play a factor. I'm not sure there is a lockup period, I'm guessing there isn't since they controlled the terms

Issue here is if the stock is quite a bit above $1.5(say $2+), the investors can convert and sell at an immediate profit, this threat can depress the stock all way down to the conversion price Plus the initial panic factor. KCG might actually get to be undervalued at some point next week

I'm sure surfer will say he sold all his stock at the close on friday. It will gap down at least 50% tomorrow and I'm being conservative here

"The coupon on the preferred is 2 percent, but all the firms are expected to convert after 10 business days." In my view this will have the psychological effect of getting people to send the stock to bellow the conversion price

Is there any other source talking about a $1.5 price?Could be a typo

Looks like my thinking wasn't bearish enough. Existing stock holders will get less than 30% of the company and have net income reduced due interest payments. KCG stock will face a bloobath tomorrow

In my experience this type of 'idiot' interest doesn't have the power to hold the initial panic selling, thats what I'm betting on. Stock rose a lot friday based on bullish expectations, all those people will be selling tomorrow. I plan to cover at some kind of selling climax tomorrow or tuesday

Assuming the details are right my fair value for the stock is $1.8 per share but I believe the market will overshoot as people will panic

If the $60M in earnings trade at 10x it will be surprising given all the risks and the surprise effect. Probably will trade at 8X. Thats a value of $480M which shareholders get 39%, $187M market cap for the stock. This means a 55% of decline in the stock, probably overshoots in the short-run

If thats right then they are issuing 160M shares against a 98M existing base. Investors will own 61% of the company and shareholders the rest. Looks like I was wrong about the 70-75%+ but that was because I forgot the interest expense. The effective ownership is bigger due that factor since you...

Its game over at this point, the debate is only how much the stock will plunge not whether it will

Very true, the interest costs decrease the value of the company for the folks without the convert bond. Citadel and KKR also walked out according to bloomberg. Its not looking good for the stock at all