KCG, the symbol for Knight Capital Group Inc, is one of the largest firms that buys and sells stocks to provide liquidity to the markets. But a technology breakdown yesterday at this major trading firm roiled the prices of 140 stocks listed on the New York Stock Exchange, undermining fragile investor confidence in the stability of U.S. stock markets. Today, KCG reported that it lost over $400 millions due to this glitch. The stock lost over 62% today and another 17% after hours as I'm writing now. It is trading around $2.15 per share. See the chart below:
This is not a small company but one of the major trading companies. When it drops
like that and lost 2/3 of its values, I'm thinking some value guys out there must be very interested in it and I think there is a good chance that KCG may be bought by others. If so, this may happen very soon. If you are willing to risk your capital (i.e. 100% loss) to make this speculation, the potential return could also be huge, maybe double or even more. This is something I'm considering to do, if a merger deal does not come in tonight.
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