Knight Capital fights for its future
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Friday 03 August 2012
Tom Joyce, chief executive of US market making firm Knight Capital, is fighting to save the company after revealing its rogue computer trading programme had caused $440m in losses.
A software glitch caused chaotic trading in scores of US shares on Wednesday morning, and left Knight stuck with enormous numbers of individual stocks that it had not intended to buy. Now that it has sold them at a loss, the company is urgently seeking new funds to repair its capital position, Mr Joyce said.
Knight shares fell by one-third on Wednesday and halved again yesterday. The $440m loss compares to its most recent quarterly profit of just $3.3m, which was already weak because of declines in equity trading volumes.
“The software had a fairly major bug in it,” Mr Joyce told Bloomberg TV. “Technology breaks. It ain’t good. We don’t look forward to it.”
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