Knight Capital Group Inc.
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| Knight Capital Group | |
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| Founded | 1995 |
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| Headquarters | Jersey City, NJ |
| Key People | CEO and Chairman Thomas M. Joyce |
| Products | Asset management and brokerage |
| Corporate Website | www.knight.com |
Knight Capital Group (KCG) offers trade execution to broker-dealers and institutional investors across all capital markets and owns a majority stake in hedge fund manager Deephaven Holdings.
In June of 2012 Knight acquired the futures division of Penson Financial Services, Inc., a subsidiary of Penson Worldwide, Inc. Through this acquisition, Knight also has assumed Penson's seats and memberships at exchanges including: CBOT, KCBOT, NYSE Euronext and Eurex.[1]
On Aug. 1, 2012, Knight said its market-making unit suffered “a technology issue” that affected the routing of trades on around 150 stocks on the New York Stock Exchange.[2] The following day, Aug. 2, 2012, Knight acknowledged that it expected the previous day's algorithmic glitches to cost $440 million, and that the firm was "seeking ways to strengthen its capital base."[3] Over the course of two days, Knight Capital's stock lost over 66 percent of its value. Knight blamed software installed on its system for errors entering millions of trades in less than an hour as the market opened the next day. The errant trades were routed to the New York Stock Exchange, which started operating a new trading platform designed to attract trades from individual investors.[4]
On Aug. 3, 2012, shares of Knight Capital Group Inc. soared 65 percent in afternoon trading after TD Ameritrade Holding Corp. said it would resume routing client trades to Knight in a sign that customer confidence in the Jersey City-based market-making firm was returning.[5]
On Aug. 6, 2012, it was announced that Jefferies, Blackstone, GETCO, Stephens, Stifel Financial and TD Ameritrade are would inject $400m into Knight through an issue of preferred shares - securities that pay out a set income, bailing the firm financially.[6]
History
Knight Capital Group was launched in 1995 as Knight/Trimark Group as a trade execution provider serving global national and regional broker-dealers, online brokers, funds, trusts and endowments.[7] The firm began trading on the NASDAQ exchange in 1998, changed its name two years later to Knight Trading Group and then again to Knight Capital Group in 2005.[8] Its global markets (trade execution) division, Knight Securities, has headquarters in Jersey City, NJ and offices in 11 other U.S. cities plus London and Singapore, while its asset management (Deephaven) division is headquartered in Minnetonka, MN with offices in Hong Kong and London.
KCG's Q1 2008 results beat analysts' expectations after its global markets division boosted year-on-year revenue by 27 percent to $218.8 million, assisted by market volatility, while its asset management division made a pre-tax loss of $4.1 million.[9]
KCG repeated in Q2 with revenue of $219 million, up more than eight percent, with global markets notching an 18 percent rise in revenue to $201.3 million, although asset management posted another pre-tax loss, this time of $7.9 million.[10]
On Dec. 8, 2009, Knight Capital Group announced that Knight Equity Markets, L.P. would become a Competitive Market Maker (CMM) on ISE’s options exchange effective in the first quarter of 2010. Knight purchased ten CMM trading rights from TD Options, LLC that cover every options class listed on that exchange.[11]
On May 12, 2010, Knight Capital Group announced the pending transfer of its listing of common stock to the New York Stock Exchange (NYSE), as well as the cross-listing of its common stock on the Professional Segment of the Paris market of NYSE Euronext. Knight's common stock begins trading on NYSE Euronext in the U.S. and Paris under ticker symbol "KCG" on May 25. Until the transfer is complete, Knight's common stock will continue to trade in the U.S. under the ticker symbol "NITE" on The NASDAQ Stock Market.[12]
Even with the cash infusion, it wasn't clear if Knight would regain the trust of other key players in the stock market to carry on and survive as a firm. Some of Knight's trading partners had said they would suspend routing trades through them until the situation settled.[13]
Products and Services
KCG's Global Markets trade-execution business segment, its best performer, operates as six main subsidiaries:
- Direct Trading Institutional
- Hotspot FX
- Knight Capital Markets
- Knight Equity Markets
- Knight Equity Markets International
- Knight BondPoint
- Knight Link
KCG's asset-management partner, Deephaven Capital Management, manages the Deephaven Market Neutral Funds.[14]
Key People
- Thomas M. Joyce, CEO and President
- Jamil M. Nazarali, Senior Managing Director, Global Head of the Electronic Trading Group Knight Equity Markets
- James P. Smyth, Executive Vice President, Senior Advisor and Senior Relationship Officer
- Robert N. Stein, Senior Managing Director, Head of Global Asset Management
- Gregory C. Voetsch, Executive Vice President, Head of Global Equities
- Leonard J. Amoruso, Senior Managing Director, General Counsel
- Bronwen Bastone, Managing Director of Human Resources
- Steven Bisgay, CFO and Senior Managing Director
- Steven J. Sadoff, CIO and Executive Vice President
- Margaret E. Wyrwas, Senior Managing Director, Communications, Marketing & Investor Relations
References
- ↑ Knight Capital acquires Penson Futures. Sacramento Bee.
- ↑ Knight Capital shares sink after algorithm glitch. MarketWatch.
- ↑ Knight Looks to Bolster Capital After Trading Glitch. Wall Street Journal.
- ↑ Knight Capital Gets a Lifeline. WSJ.com.
- ↑ Knight Capital Gets a Lifeline. WSJ.com.
- ↑ Knight Capital Receives $400m Infusion. FT.com.
- ↑ Knight Capital Group Inc. (NITE). Yahoo Finance.
- ↑ About Knight. Knight Capital Group.
- ↑ Knight Capital Q1 profit beats Street, boosts shares. Reuters.
- ↑ Knight Capital Group Announces Earnings of $0.32 Per Diluted Share for the Second Quarter 2008. Knight Capital Group.
- ↑ Knight Capital Group and ISE Announce Knight’s Purchase of Competitive Market Maker Trading Rights on ISE. Knight Capital Group.
- ↑ Knight Capital Group to Transfer Listing to NYSE, Cross-List on NYSE Euronext. Benzinga/PR Newswire.
- ↑ Trading firm Knight Capital gets financial lifeline, avoids collapse after huge stock glitch. StarTribune.
- ↑ Careers at Deephaven. Deephaven Capital Management.
