Bloomberg reports that the market maker responsible for about 10% of American equity volume turned to Goldman Sachs to buy the firm out of trading positions acquired by mistake when a computer program malfunctioned, a person with knowledge of the matter said. It has until the close of business on August 6th to complete the transaction.
'There’s a lot of questions about their liquidity - do they have the money to get through the trade settlement on Monday ?' Patrick O’Shaughnessy, an analyst at Raymond James & Associates Inc., said in an interview with Pimm Fox on Bloomberg Television’s Taking Stock. 'They have to find somebody to either invest capital into the company or somebody who’s just going to buy the company outright'.
Knight made it to the weekend after receiving short-term financing for market making, according to a person familiar with the matter who requested anonymity. TD Ameritrade Holding Corp. and Scottrade Inc., which sent trades elsewhere for execution after Knight’s software bug, said they were routing orders back. Knight’s stock surged 57% to $4.05 in New York after tumbling 75 percent in the previous two sessions.
Hit the link below to access the complete Bloomberg article: