Knight Capital completes $400 million financing

As expected the worst scenario for Knight was avoided as it managed to secure financing which will allow it to continue operating. Knight found itself in a huge financial trouble after its algo failed and accumulated it $440 million in loses in just 45 minutes. Following this some suspected that Knight will have to sell some core assets such as Hotspot to be able to meet its obligations.

Infusion of new capital and resulting Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term will allow Knight to resume normal operations immediately

JERSEY CITY, New Jersey (August 6, 2012) – Knight Capital Group, Inc. (NYSE Euronext: KCG) announced $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation.

“We are grateful for the support of these leading Wall Street firms that came together to invest in Knight,” said Tom Joyce, Chairman and Chief Executive Officer, Knight Capital Group. “The array of participants in this capital infusion underscores Knight’s critical role in the capital markets. With our financial position strengthened and liquidity restored, we will continue to provide clients with trading in a broad range of securities, high-quality Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term and outstanding client service.”

Under the terms of the transaction, Knight issued two percent preferred shares that may be converted into common stock at $1.50 per share. The owners of the preferred shares may convert all or a portion of the preferred shares into Knight Class A Common Stock. Knight has committed to expand its Board of Directors by adding three new members. Additional details on the financing will be available in a Form 8-K to be filed today.

“Knight’s financial position and capital base have been restored to a level that more than offsets the loss incurred last week. We thank our clients, employees and partners for their steadfastness during a brief yet difficult period and we are getting back to business as usual,” added Mr. Joyce.

As previously announced, the software that led to the August 1, 2012 trading issue was removed from the company’s systems. The company continues to review the matter.

The advisors to Knight on the transaction are Sandler O’Neill + Partners, L.P. and Wachtell, Lipton, Rosen & Katz.