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If KCG raises $400m at a discount to fridays close as CNBC indicates the investors will own at least 50% of the stock. If my thinking was correct they will get more like 75%+. 25% of a say $1B valuation the company had before will result in a $250M market cap, roughly a 40% decline in the stock...

They earn $100M in a good year, normalized earnings is less than that. The multiple should also be lower due to the fact that you can wipe out years worth of earnings really quickly

You can always get the assets in bk so in the private negotiations before bk you almost ALWAYS will make the offer lower than what you would do in the bk. If there are synergies or whatever, then you buy the parts that have synergies and don't buy the rest Honestly, I believe you are...

No one is arguing the company doesn't have value, they have but the factors in this situation call for a rescuers to get a good deal instead of the stock holders. In 2008 there was a financial crisis with lots of financial companies in trouble, most situations the shareholders got a bad deal...

-There might be enforcement action by regulatory agencies against the company -There might be legal liabilities tied to the event -Investors have less than 3 days to do due diligence -There will certainly face more regulatory scrutiny going forward There is quite a bit of uncertainty in...

Company was worth $1B before glitch, but the glitch showed that the business model has more uncertainty than thought, so it should trade at a lower multiple. To be optimistic lets call that $700M Do you like to throw money in the garbage can?Nobody likes, in this case here taking shareholders...

I suppose a scenario that could happen that would be good for the stock is if the company just sold assets like crazy, essentially a chap 7 over a weekend outside bk. Company has 8-1 in assets over tangible equity, can they sell everything in 1 weekend and still justify the $362M in market cap?I...

Best case scenario for KCG that I can see. They raise $200M, sell some assets which raises another $50-$100M. The equity raising ends up giving 51% of the stock to the new investors. Current shareholders will own 49%. The company is worth something like $500M(But with the asset sale, it will be...

As a short, the only scenario I'm worried about is if they raised $200M a good prices and sold assets at good prices too in a way that increased book value(equity). In this situation maybe the current shareholders won't do so badly but if they sold the 'crown jewels' at good prices, I'm not sure...

Lets say they raise say a small amount, $300M at $362M market cap if they got in at current prices they would own a little less than 50% of the company. But we know that is not going to happen, they will want a big discount. This means they will own more like 70%+ $300M would leave the...

Based on the information from today it seems that there are the following options -Financing through some kind of convertible bond(With likely equity as well) -Bk Chap 11 -Asset sales It seems likely to me it will be a mix of option 1 and 3. A piece of information that I couldn't quite...

"Goldman was counterparty to unwind Knight's problem trades, CNBC says CNBC's Kate Kelly says Knight Capital (KCG) will need to make $440M payment to Goldman (GS) by Monday to settle trades." You bulls think Goldman gives a shit about your stock value?They own the company now

If you think about it the only reason one would lend to KCG to keep it alive is to get the earnings of the company. The convertible part will provide those earnings. Putting a generous estimate the current shareholders will own 20% of the new KCG and valuing the company at $500M(Half of the...

Where did you get this rumor about the losses from?

http://www.osler.com/newsresources/Default.aspx?id=1383&col=10 " For example, both the New York Stock Exchange (NYSE) and Nasdaq require shareholder approval at or above 20% dilution, while the London Stock Exchange threshold is 25%."

4 options for KCG -BK chap 11, asset sales -Take under at a nominal price(unlikely since shareholders might vote the deal off, uncertainty, 90 days to close). A premium is even more unlikely due the capital needs in addition to the price paid, otherwise the company wont be able to roll over...

Penson chart http://finance.yahoo.com/q/bc?s=PNSN+Basic+Chart&t=1y

When a company is facing BK they don't have leverage in the negotiations. Remember Penson?They got acquired for $5M. almost nominal amount. Same thing will happen if they sit down with Citadel or Goldman, its their price or bk

What you are not realizing is that they have a $600m capital hole, so not just they have to find a buyer they have to find someone willing to put $600m at an attractive price for current shareholders for your trade to work out. Market cap is something like $200M, you think someone will put $600M...

Bullish points -KCG has very good technology(I spoke with a MMer who worked for them in the 90's) that has significant value -Stock has been hammered so it could attract idiots -It has a history of profitability even after the loss($1.4B in retained earnings) Bearish Points -People...