Knight avoids collapse with $400 million lifeline
NEW YORK – Knight Capital Group, the trading firm responsible for last week's stock market mayhem, avoided collapse by lining up a $400 million lifeline from a group of other Wall Street companies Monday morning.
But the money comes at a steep price.
Knight says it will get the cash infusion from an investor group led by Jefferies Group, as well as Blackstone, Getco, Stephens, Stifel Nicolaus and TD Ameritrade. In exchange, the group will receive stock that can be converted to a 73 percent stake in Knight, which means Knight is essentially handing over control to the investor group. Knight will also add three directors to its board.
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