Knight Considering Bankruptcy, Looking At 363 Asset Sale

Tyler Durden's picture

This may be it. Via Fox News:

  • VIRTU OUT OF BIDDING FOR KNIGHT CAPITAL
  • KNIGHT’S JOYCE CONSIDERING BANKRUPTCY REORGANIZATION
  • KNIGHT LOOKING AT ‘363’ REORGANIZATION TO SELL ASSETS
  • KNIGHT LOOKING TO EMERGE AS VIABLE COMPANY

363 Asset sale? This is what we said earlier when we reported on the rumors of a sale to Virtu: "Will it happen? Maybe. Although we doubt it - why pay for equity value when one can pick up the functioning assets in a Chapter 363 asset sale which also sticks the creditors with all the crappy assets?" Sure enough. Sadly, what this means for the company 1,500 employees is that about 80% them will be out of a job due to an algo gone wild. And to then we have been warning about the impact of HFT for the past 3 years.

Perhaps now that people's livelihoods are about to destroyed even the porn-addicts at the SEC will finally take this matter seriously.

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Dr Benway's picture

I'm supposed to feel sorry for the people who worked at Knight? Reaaaally?

 

The bigger problem is the billions places like these have stolen over the years.

JLee2027's picture

No more multi-million dollar Christmas bonus? No more drinking champagne toasts from a balconey while laughing at the Occupy protestors? What is the world coming to?

bdc63's picture

They waited until after the market close to report this? .... huh ... wonder why they did that ....  ;)

spastic_colon's picture

surely you are aware that the large banks are behind this also, eventually they will control the algo trading as well, partly by "attritioning" the smaller players.

SWRichmond's picture

Can't they just do some repo 105's?

hedgeless_horseman's picture

 

 

At BanKnightofAmeriCountryWideMerriLynch we offer a broad portfolio of campaign finance solutions...

AldousHuxley's picture

Nothing like seeing money changers go bk.....have a good weekend everyone

Bananamerican's picture

i heard KFC is hiring....the Bollinger's on me.

AldousHuxley's picture

fried chicken is depression proof business world wide.

 

Colonel Cluck was a freaking genius.

 

they can fry it and serve it to you cheaper than you what raw chicken costs at the market.

 

 

KFC first fast food in China. even communists can't resist.

On last supper, Jesus had fried chicken.

Normalcy Bias's picture

...and Knight likely laments that 'if only liabilities were as easy to vaporize as assets, nowadays'...

cougar_w's picture

HFT is the only game they got left.

Sucks to be them, because they'll have to take money from each other now.

DaddyO's picture

 

Where is dic_in_the_box telling us how much money he made off Knight yesterday?

DaddyO

Freddie's picture

Most individual investors have quit the rigged casino of Wall Street/3 card Monti as in Mario Monti.

Bananamerican's picture

"surely you are aware that the large banks are behind this also, eventually they will control the algo trading as well, partly by "attritioning" the smaller players"

"suppose they threw a market..........and nobody came" ?

In a way, I enjoy this more than if the SEC or CFTC had been caught actually doing their (assumed) jobs.

I like the idea of these S.O.B.s taking themselves down in the age old ways of the worst of the human race...

through arrogance, hubris, short-sightedness and GREED

max2205's picture

Whores and hookers seeing revenue desimated

Price of pussy going down. So to speak

AldousHuxley's picture

Is there a place where all of this financial shenanigans are being recorded?

 

AIG

Lehman repo 105

fannie mae/freedie mac nationalization

bank bailouts

Madoff ponzi

Sanford ponzi

Facebook IPO
BATS IPO
Flash Crashes

MF Global missing customer cash

Barclay, bank of england led Libor fixing

Knight Capital

JohnKozac's picture

"Investors hold $375 million of Knight convertible notes and can demand repayment if there’s a “fundamental change,” including a sale, according to a 10-K filing. The biggest owners of the notes are Goldman Sachs, Oaktree Capital Management, Invesco Ltd. and Citadel Advisors LLC, according to data compiled by Bloomberg. The bonds lost 16.125 cents to 67 cents on the dollar, sending the yield up to 20 percent."

 

 

http://www.bloomberg.com/news/2012-08-02/knight-said-to-open-books-to-su...

Dr. Richard Head's picture

Hopefully some sort of equilibrium where true labor is valued accordingly and fictional fractional rehypothicated horseshit reverts to the true mean.

Push on my aggregrate demand string bankster bitchez.

MachoMan's picture

I guess we should start worshipping the machines then if labor is valued accordingly...

Dr. Richard Head's picture

All hail the co-located NYSE servers.  All hail the algos.  All hail Benny's Printing Press.

Buckaroo Banzai's picture

Speaking of bankrupt, so is the story we're being fed about the Aurora shooting:

http://americankabuki.blogspot.com/2012/07/these-arent-same-man.html

JLee2027's picture

Well he was arrested in Occupy San Diego right? Then they should have fingerprints. Sorry, but I think it's the same guy from the photos anyway.

Totentänzerlied's picture

I thought the same thing when I saw the pics a week ago. Oh well.

YuropeanImbecille's picture

This is good for us westerners who work in IT. The latest software that caused this debacle was operated by Indian 'experts' that took over the code base.

So kcg saved a couple of hundred grand on replacing western coders with Indian 'experts' and this cost them the company :)

I do not understand how this expert system could invert the decisions, there could be an super easy explanation for this... And if any of you Indians read this please tell me if it was a back chaining check that took frame command?

Or did you invert a variable ?

Thanks

AldousHuxley's picture

H1B is not just for IT anymore and those indians have been in US for a decade now, so they got greencards. and that's when they get laid off.

It looks like they stopped hiring even H1Bs starting 2008.

However, the salaries aren't too bad.

 

Director, Quantitative Trading              $160,000    2007-05-08
VICE PRESIDENT, QUANTITATIVE STRATEGIST     $150,000    2008-01-17
VICE PRESIDENT, PROGRAMMER/ANALYST         $140,000    2009-12-10
ASSISTANT VICE PRESIDENT, QUANTITATIVE ANALYST     $140,000    2008-09-26
Manager, Software Research and Development     $150,000    2007-06-26

 

 

YuropeanImbecille's picture

I am sorry but those salaries are shit! A admin dude at a bank gets 125.000... For a real expert in expert systems you get a consultant that will take home at least 1,000,000 for a 6-9 month project.

I did 250,000 a year in my youth as a AVP... Caring for trading infrastructure.

If you read this and work for less than 200k in an trading environment you are a idiot and a fool!

AldousHuxley's picture

figures dont' include bonus

 

1099s get market rate which is typically x2~3 salary to cover bennies and taxes and sales (self employment TAX for being too good to work for corp)

 

well if you are a programmer in a trading environment, what can I say..... traders get the big pay in trading environment.

 

That's why Aleynikov was paid $400K per year by Goldman Sachs and still wanted out. (offered 1.2M)

YuropeanImbecille's picture

Well Aleynikov is a guy who is a real expert. Don't know him and have never met him.. But 400k for the work he did is ridiculous (and he realized that after some time) maybe he did not believe it could be done... I do not know.

I would have asked for 36,000,000 a year if I had the skills and opportunities he had.

But you are right the traders make the big money, and that is fine considering their faily short careers. But it is important to realize the value of your own work whatever you do. And if you build a kick ass expert system that outperforms others you do not settle for crumbs.

For the next gen systems coming online the price tag is closer to a quarter billion, therefore if you are great do not settle for less than millions.

Two systems are never identical, ask altavista or bing after google showed how it is done.

LongBalls's picture

Those employees were never working anyway. Digging a ditch is working. They were dusting off their monitors to look at the pretty colors.

tj3's picture

Fuck Knight Trading. They have frontrun my orders so many times, it ain't even funny.

Larry Dallas's picture

Should be an interesting scene in the Hamptons this weekend. Especially after the pink slips are given tomorrow afternoon.

Not saying the specialist model didn't have its flaws that are natural with greed and front running being one of them, but you never saw anyone of them blow up as spectacularly as this has.

banksterhater's picture

They're not employees, they are PARASITES! Fumigate them.

jonjon831983's picture

Bah, hope you don't direct that to those lower level office people like janitors and secretaries who get less than the scraps.

AldousHuxley's picture

KCG

 
-4.36 (-62.82%)

After Hours: 2.17 -0.41 (-15.89%)

 

one short trader is getting lucky tonight!

mayhem_korner's picture

 

 

By "one short trader", do you mean (i) not you, (ii) an insider, or both?

AldousHuxley's picture
Short Interest (Shares Short): 6,784,200 Not one, but seems to be many % Owned by Insiders: 1.92% not many insiders either Stifel Nicolaus analyst who gave
Buy rating at $16
JLee2027's picture

Where is that guy who claimed he bought 100K shares at 2.33 earlier today? 

I'll bet he's crapping his pants now.

Dr. Richard Head's picture

Correction, it's called Making a Morgan.

sessinpo's picture

And Slaughterer @ $2.30

2673536

"We bought 100,000 shares of KCG at $2.30."

 

 

 

Freddie's picture

The Tyler's need to post the biggest holders of this dogshit stock.  My guess is Whitney Tilson or whatever his name is owns it.  Probably many hedge fund schmucks too. 

Haager's picture

Did someone notice that the stockprice already went south the day of the glitch, hours before that glitch occured?

Someone became rich by suicide-attack?

T-Silver's picture

Where is JPM in all of this?

Buck Johnson's picture

Got to wonder if those segregated accounts at Knight are fully funded.