J.P. Morgan Reiterates Neutral Rating on Knight Capital Group
In a report published Wednesday, J.P. Morgan & Co. reiterated its Neutral rating on Knight Capital Group (NYSE: KCG).
J.P. Morgan noted, “Knight has accepted Getco's proposal to buyout Knight for a cash and stock deal, with essentially a 2:1 ratio of cash to stock. The cash paid is at $3.75/share. We view this as a positive for Knight's shareholders based on the deterioration in Knight's business and share price following a catastrophic trading glitch. Although the business has shown improvement in activity levels and a recovery in market share, we thought that shareholders would always value Knight at a heavy discount to its intrinsic value due to this glitch. Our view was that Knight's shareholders would eventually force a sale.
Knight Capital Group closed on Tuesday at $3.33.
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