Knight was forced to take on new investors following a software glitch on 1 August that unleashed a flood of orders to the New York Stock Exchange. Stan Honda/AFP (Knight was forced to take on new investors following a software glitch on 1 August that unleashed a flood of orders to the New York Stock Exchange. Stan Honda/AFP)
Knight was forced to take on new investors following a software glitch on 1 August that unleashed a flood of orders to the New York Stock Exchange. Stan Honda/AFP
(Knight was forced to take on new investors following a software glitch on 1 August that unleashed a flood of orders to the New York Stock Exchange. Stan Honda/AFP)

Getco bids to take control of Knight Cap

Deal sends Knight’s shares up more than 20% in premarket trading on Wednesday

Trading firm Getco Holding Co offered to take control of Knight Capital Group Inc in a deal that it said valued the electronic trading firm at $3.50 a share, sending Knight’s shares up more than 20% in premarket trading on Wednesday.

Jersey City-based Knight was forced to take on new investors following a software glitch on 1 August that unleashed a flood of orders to the New York Stock Exchange, resulting in a massive position Knight had to unload at a loss, pushing it to the brink of bankruptcy.

Sources familiar with the situation have said Getco and Virtu Financial LLC were interested in Knight for its market-making operation. Knight, which uses computer models to match buy and sell orders in stocks and options, executes around 10% of US volume.

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