This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Knight Capital in Talks to Sell Biggest Unit: Report

NEW YORK -- Trading firm Knight Capital Group Inc. (KCG) may sell its market-making business, which suffered a trading glitch in August that cost the company more than $460 million in the third-quarter losses, according to The Wall Street Journal.

The report said Knight Capital has spoken to at least two rivals that are interested in buying the market-making business and expects to receive proposals this week.

The Jersey City, N.J., company did not immediately respond to a request for comment from The Associated Press.

Knight takes stock trading orders from big brokers like TD Ameritrade (AMTD) and E-Trade (ETFC). It routes the orders to exchanges including the New York Stock Exchange. In 2011, the market-making business reported net earnings of $256 million in 2011 on $705 million in revenue. That was more than half of Knight's total revenue of $1.22 billion.

> > Bull or Bear? Vote in Our Poll

On Aug. 1, Knight Capital sent numerous erroneous orders in 140 stocks listed in the New York Stock Exchange. Those orders were behind some sudden swings in stock prices and surging trading volume. The company said the problem triggered when it installed new trading software. The company's stock price plunged about 75% in two days.

Later Knight Capital took a $400 million infusion to avoid collapse, essentially selling control of the firm to a group of financial firms led by the Jefferies Group (JEF), as well as Blackstone (BX), a big private equity firm; the trading firm Getco; Stephens, Stifel Financial (SF) and TD Ameritrade.

In the third quarter, Knight Capital lost $764.3 million and said the software glitch cost it $461.1 million in financial losses. Knight also took a charge of $143 million to reflect its weaker brand and competitive position after the episode.

Knight Capital shares, which traded as high as $13.59 in January, closed Friday at $2.49. The stock hit a 52-week low of $2.24 on Nov. 15.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs