Final Berserk Algo Bill To Knight - $440 Million; Stock Implodes

Tyler Durden's picture

While JPMorgan thought it was $170mm, we said last night the number was notably higher - and sure enough, via Bloomberg:


KCG is down another 50% this morning to $3.45! And here is what we explicitly warned yesterday: "In  other words, with  Knight losing about $300 million in market cap today,  investors are  speculating that the net loss to the firm will be just  that as it has  to foot the bill. Considering the volume and breadth of  the impaired  universe, this will likely be very big underestimation of  just what the  final bill will be to Knight." Sure enough...

Knight Capital Group Provides Update Regarding August 1st Disruption To Routing In NYSE-listed Securities

PR Newswire

JERSEY CITY, N.J., Aug. 2, 2012

JERSEY CITY, N.J., Aug. 2, 2012 /PRNewswire/ -- Knight Capital Group, Inc. (NYSE Euronext: KCG) today provided an update on the August 1, 2012 disruption to routing in NYSE-listed securities.

As previously disclosed, Knight experienced a technology issue at the open of trading at the NYSE yesterday, August 1st. This issue was related to Knight's installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market. This software has been removed from the company's systems.


Clients were not negatively affected by the erroneous orders, and the software issue was limited to the routing of certain listed stocks to NYSE.


Knight has traded out of its entire erroneous trade position, which has resulted in a realized pre-tax loss of approximately $440 million. Although the company's capital base has been severely impacted, the company's broker/dealer subsidiaries are in full compliance with their net capital requirements. Knight will continue its trading and market making activities at the commencement of trading today. The company is actively pursuing its strategic and financing alternatives to strengthen its capital base.

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LULZBank's picture

KCG - kamikaze Capital Group Bitchezz!!!

GetZeeGold's picture



Oh come on.....even Muppets get mulligans.


GetZeeGold's picture



Go on without me.....let me know what happens.


BaBaBouy's picture

Fucking Out Of Control CASINO ???

WHERE Are the Fecking Regulators ???

tocointhephrase's picture

MDB, Robo? Come on make me sec.....MUWHAHAHAHAHAHAAAA

veyron's picture

Down  nearly 60%:

2.82 -4.12 (-59.37%)

whstlblwr's picture

ZH has the best financial reporting on the web. But if you do a Google search for Knight Capital, try to find ZH. What else is Google blacking out? Fuck you Google.

Thomas's picture

Knight has lost 60% of its market cap. As ET would say, ouuuuuuch.

Manthong's picture

He who lives by the algo, dies by the algo.

Who’s next?

Bananamerican's picture

"There has been a disturbance in the Casino..."

knighty night niggaz!

Born-Again Bankster's picture

Those KCG puts are up 18x since I bought them after watching that damn ZH video with those guys saying, "whoever is doing this is losing hundreds of millions of dollars". Thanks guys...fahking awesome.

KowPie's picture

@whstlblwr: ...try to find ZH...


...the bottom of the 5th page of search returns:


The Dark Pool Knight Capital Plummets | ZeroHedge



TheFourthStooge-ing's picture


Fucking Out Of Control CASINO ???

WHERE Are the Fecking Regulators ???

They are investigating quite thoroughly.

Buckaroo Banzai's picture

The regulators are too busy raiding raw milk suppliers. Now THAT'S fraud!

Tijuana Donkey Show's picture

Can't have people eating something that might improve their health and doesn't come in a chargable pill form. We also need to crackdown on medical marijuana, as it might challenge some other pills, even if people in a "democracy" "voted" for it in an open election. America is big on only offering two choices on an issue: big agricuture or starve, pills or death, republican or democrat. 


P.S. Raw milk is AWESOME! Get some.

max2205's picture

China hacked into Knight and well the rest is history....

g speed's picture

not---IT guys watching porn for 45 mins and not watching the tape---lol

Umh's picture

Front running routine choked.

ToNYC's picture

V. (Vlad the Virtual) Lenin was spot on about given enough digital rope that Capitalism (divorced from Socialism completely) will invent algos and stuxnet themselves.

DeadFred's picture

I believe he said "The Capitalists will sell us the Cat5e cable with which we will hang them"

RiverRoad's picture

This had nothing to do I suppose with the coincidentally kaput cyber bill in Congress?

phalfa5's picture

In A.D. 2012

War was begining

CEO: What Happen ?

IT Head: Somebody set us up the bomb.

I Am Not a Copper Top's picture

BWAAAAAAAAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!  Serves the bastards right.  Chalk one up for the humans against Skynet.  John Connor will teach us how to smash those metal motherfuckers!!!!!!

orangedrinkandchips's picture

"and were gonna smomke an ounce to that....G's up, Knights down...."

spankthebernank's picture

What better way to thin the market making herd than by attacking Knight. Surely the hit was put out by Goldman or the morgue. The less players, the more control.

Panafrican Funktron Robot's picture

Knight had just recently acquired another dud (Penson's futures unit), so this is pretty interesting, particularly in light of other futures firms taking a gigantic fucking dump on our collective heads.  Interesting that they're being systematically wiped out.

d edwards's picture

J P M looses billions, but don't worry-everythings OK!

malikai's picture

Deploy the Squid, prepare the Morgue.

Levadiakos's picture

The Dark Knight Rises..... NOT

GMadScientist's picture

The Dark Knight..."retroactively" shits its pants.

viator's picture

Maybe this will loosen the Fed's bowels.

PrintingPress's picture

Providing liquidity!

orangedrinkandchips's picture

42 and dropping like it's hot......but who's counting?


This is beautiful.....another fraud blow up....just get this main stage so people finally wake up.


Ban the bots....

Catullus's picture

Are they contemplating options for their severely damaged credibility? Oh yeah. No one gives fuck about that when it comes to other people's money.

Mercury's picture

Welcome to America's capital markets.

Home of the do-over.

The Axe's picture

holy shit  they lost money faster then MF Global

GetZeeGold's picture



Time to move to France!


LongSoupLine's picture

Correction:  Like Corzine, time to hide in the Hamptons.

GetZeeGold's picture



I'm pretty sure Eric Holder doesn't even know where the Hamptons are.


Dr. Engali's picture

Looks like Knight is about to be Corzined.

buzzsaw99's picture

they will have to steal a bunch of sub-pennies to make that back

GetZeeGold's picture



Skynet: I'll be back.