Under the plan being discussed, TD Ameritrade and Getco would be the primary investors in a consortium of more than six entities that would provide a total of $400 million in capital to Knight, The Wall Street Journal reported on its Web site Sunday.
The report cited anonymous sources familiar with the situation and said Knight was also pursuing other potential lifelines.
A Knight representative declined to comment, the Journal said.> > Bull or Bear? Vote in Our Poll On Wednesday, the Jersey City, N.J. based market maker suffered a software glitch that caused it to send out erroneous trading orders. On Thursday, the company announced it had suffered a $440 million pretax loss as a result. Under the consortium plan, the investors would purchase debt that would convert into stock at $2.50 a share, the Journal report said. Jefferies & Co. is involved in setting up the arrangement, the report also said. Knight Capital's shares, which closed Tuesday at $10.33, plummeted on Wednesday and Thursday on news of the software glitch and related losses, and the stock ended Thursday's session at $2.58. Shares recovered some of those losses on Friday on news that Knight had obtained a credit line that would keep it operating through the day. The stock ended Friday's session up $1.47, or 57%, at $4.05.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV