Knight Capital stock plummets to near $2
By Maureen Farrell August 3, 2012: 7:09 AM ET
Investors are becoming increasingly concerned about the fate of Knight Capital Group (KCG), pushing its stock price closer to $2 in premarket trading Friday.
Shares tumbled nearly 10% to $2.33 early Friday. Knight's stock plummeted 63% Thursday, after falling 33% on Wednesday. Its shares traded around $10 earlier in the week.
The trading execution firm announced Thursday morning a loss of $440 million from a software glitch that caused errant trading in nearly 150 stocks Wednesday shortly after the market opened. Knight is one of the major so-called market making firms that has the ability to execute trades on both major exchanges -- the Nasdaq (NDAQ) and New York Stock Exchange (NYX).
Two online brokerage firms -- Scottrade and TD Ameritrade (AMTD) -- stopped executing orders to trade stocks through Knight Capital until they complete further testing on their systems, according to representatives at both companies.
Related: Why Knight lost $440 million in 45 minutes
E*Trade also diverted its orders away from Knight Thursday, according to a person familiar with the matter. And Citigroup rerouted some of its order flow, said a second person familiar with the matter. Both E*Trade (ETFC) and Citigroup (C) declined to comment.
Knight Capital said it is looking to raise capital in a statement released Thursday morning.
The company did not return repeated requests for comment.
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