White Knight For Flailing Knight: WSJ Reports Potential Bailout Merger In The Works

Earlier we said that Knight better sell itself today or it's lights out. Sure enough, here come the rumors via the WSJ:

Knight Capital is in talks with Virtu Financial, a big player in high-speed trading and "designated market maker" on the NYSE, about a potential merger or infusion of capital

And more from Dow Jones:

  • WSJ: Knight in Discussions About Possible Deal With Electronic-Trading Firm Virtu — Sources
  • WSJ: Talks Also Involve Silver Lake Partners, An Investor in Virtu — Sources
  • WSJ: Talks in Early Stages and No Deal Guaranteed — Sources
  • WSJ: Knight Also in Talks With Other Potential Funders, Partners — Sources

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? Just like Barclays did with Lehman for millipennies on the dollar.