Attempting to Avoid Bankruptcy, Knight Capital Secures Last Minute Lifeline
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Originally published on Fox Business
Knight Capital Group (KCG: 3.44, +0.86, +33.33%) told brokers Friday morning that the embattled market maker has received a badly-needed line of credit, raising hopes the firm reeling from a $440 million trading loss can survive the weekend without a bankruptcy filing.
Shares of Knight Capital, the largest handler of stock orders for U.S. retail brokerages, surged as much as 33% on the news, which FOX Business's Charlie Gasparino confirmed. However, the company's shares remain off more than 65% since Tuesday's close of $10.33.
It's not clear which lender or lenders are providing the line of credit, which is seen as a stop gap to replace losses from an erroneous trade, but Knight had been in talks with J.P. Morgan Chase (JPM: 36.06, +0.89, +2.53%) over an emergency loans.
Thanks to the line of credit, Knight executives have told trading firms to route trades through the firm as usual.
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