Knight Capital Group Inc. (KCG) said losses from yesterday’s trading breakdown are $440 million, more than some analysts had estimated, and the firm is exploring strategic and financial alternatives. Its stock plunged.
Knight said it will continue its trading and market-making today as it considers its options. Yesterday’s issue was related to the installation of trading software and resulted in the company sending “numerous erroneous orders,” the Jersey City, New Jersey-based firm said today. The stock tumbled 60 percent to $2.75 at 8:32 a.m. New York time today.
Shares of Knight, one of the largest U.S. market makers, plunged 33 percent in record volume yesterday as investors speculated on how much the breakdown that sent stocks swinging as much as 151 percent will cost the company. Analysts at JPMorgan Chase & Co. estimated yesterday that Knight’s loss would be as much as $170 million, while Raymond James & Associates Inc. said the amount could be “hundreds of millions.”