KCG down due to rumor of algo gone wild

if you back out intangibles and the assumed trading loss equity/shr is still 6+

NITE is only valuable if it's not NITE anymore...as it stands(or stood) they don't have much leverage in negotiating a deal that reflects the tangible equity left.

it seems the equity is now just a barometer of what kind of s/t funding they can(or did) work out.
 
Quote from m22au:

OK, then how about Charlie Gasparino's recent tweets:

https://twitter.com/CGasparino

FBN News: knight sought new LOC after failing to meet existing covenants w JPM unclear which bank is looking to lend; eyes convert deal

FBN News: sources say every firm looking to get a piece of knight action either in or out of bankruptcy; convert deal wld HEAVILY dilute SH
More...

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 pre-glitch valuation seems reasonable, one analyst also thinks its worth this), gives a market value of $100M or $1.12 per share for the current stock. Even giving 50% of the new co to current shareholders the current stock price is still overvalued
 
Quote from Daal:

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 pre-glitch valuation seems reasonable, one analyst also thinks its worth this), gives a market value of $100M or $1.12 per share for the current stock. Even giving 50% of the new co to current shareholders the current stock price is still overvalued
More...

Agree that 20% for current shareholders seems generous.
 
"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
 
$0 for the shareholders and 60 cents on the dollar for bondholders, or less after bankruptcy court.

Not even a glass of water for these bastards. FOK them.
 
Quote from Daal:

"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
More...

thanks Daal
 
Quote from Daal:

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 pre-glitch valuation seems reasonable, one analyst also thinks its worth this), gives a market value of $100M or $1.12 per share for the current stock. Even giving 50% of the new co to current shareholders the current stock price is still overvalued
More...

If solvency weren't an issue, how many customers would be trading with Knight today?

I could see several firms justifying1Bn for this. If you don't have a market making presence here's your chance to get one of the best ones for 1/2 of what it would have cost last friday. 1Bn = 450MM to margin call and 550MM to shareholders. And waiting to bankrupcty can be a problem because the pipes to vanguard, etc are only valuable if they are turned on.

And why would a firm pay 1Bn to do this? Because to homegrow into the business, it would cost 1Bn anyway + many years of development.

And this isn't even counting the synergies... a firm like Jefferies could buy this and will instantly improve their insitutional business through better crossing and marketshare (which in this business marketshare begets more marketshare). There's probably a dozen firms who could add a new business for little money.

I can't speak to the Goldman stuff. I don't know the intracacies of their dealings and agreements as broker-dealers.

Right now, it seems like the market is agreeing with me, but this will end up as a binary event in a few days.
 
** TD Ameritrade to Resume Routing Client Trades to Knight Capital



** Barclays Maintains Knight Trading Group at Equal-weight, Lowers PT from $12 to $3

aaaahahahaha
 
Quote from joneog:

** TD Ameritrade to Resume Routing Client Trades to Knight Capital



** Barclays Maintains Knight Trading Group at Equal-weight, Lowers PT from $12 to $3

aaaahahahaha
More...

timestamps matter here.

TD news at 2:30; Barclays note at 5am. And they say in the note it was based on tangible book times a discount. They didn't evaluate strategic options.
 
Quote from Daal:

"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
More...

After all the blow ups in this space, If someone buys this they are dumber than dirt. Who knows what liabilities lay under the rugs?

Just let it BK and be done with it.
 
You must log in or register to reply here.
Back
Top