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Gasparino: Knight Capital Shopping Itself to Save Company

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  • Description

    FBN's Charlie Gasparino on Knight Capital's erroneous trades.

  • Duration 3:43
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Breaking news around nightcap at all but trading -- which cost the firm 440 million dollars.

And it's fight for survival.

All torn up that stock price up for you I yet again in the dramatic fall for Knight capital over the last 24 hours said Charlie Gasparino as we said has been reporting on this story.

-- the next 24 to 48 hours will really be crucial to the survival of the firm and he spearheads our coverage today but we're also joined by Robert Steven Kaplan former.

Vice chairman of Goldman Sachs and Nicole Petallides in her position at the New York Stock Exchange to Charlie.

Let's start with you what are you learning this morning.

We did they arts they are desperately trying to sell themselves -- the latest that the fox -- network has learned the these people the the -- the possible buyer that a lot of people are citing Citadel investments this is a company.

That does some of the same stuff the night does -- mines and banks have looked that'd have not been on this on this thing.

So right now Tom Joyce the CEO of of knights of Knight capital is in the desperate attempt to save itself as we reported earlier they're seeking the financing.

From JPMorgan I do not know that financing.

Went through I will tell you this though guys you look at that stock price.

And out that is a -- as a nasty looking stock price that is what is known as a death spiral I hate to put it is no other way to put it you know.

On a famous after the fact.

When Lehman Brothers back in 2008 -- was one of the lead by I broke a lot of stories about that about that scandal back then about about its implosion that led to the financial crisis.

When that stock that warning hit thought three dollars and like fifty cents that's when you knew they were done now I'm not saying -- this guy is done.

That Tom Joyce is a Smart guy lots of friends industries are you just tell you that that stock price says that the street is betting that and -- -- and just to bring you up on what we understand.

They are looking for financing.

They are looking from from JPMorgan is one of the major banks obvious choice the biggest bank around.

They are looking to sell themselves and that seems to be the one thing that most people are betting they need to do -- -- -- find and white Knight suitor who will that be.

The name that a lot of people talk about it and I have a calling the Citadel they have not they have been great talent firm can give -- how about Chicago -- -- and that is the one firm that people pointed to could be the savior for -- for night we we should point out that if they do buy -- -- Citadel or anybody -- this firm.

They are not gonna buy it for a lot of money just look at the balance sheet.

Doesn't have a lot of cash.

The stock prices gotten -- right.

They get to this point I mean you've got walk us through like that that trait that erroneous trade and he's so what you want us to revisit yesterday's -- OK but I will do that.

Did yesterday what happened was that.

Knight Knight capital entered into a five billion dollar or -- -- trade okay five billion that number has not been disclosed.

This apply it to this this is a firm would a one billion dollar market cap and they lost about three quarters of the market cap now why is that bad while he got an erroneous trade.

It's not something that you want to you you basically have to pay for that.

-- and -- for that trade and by and by the way not having the regulators the SEC.

And the New York Stock Exchange DK or kill those -- -- To clear them you know improper and we can just start from ground zero that was the problem because of strict trading rules lot of became after the flash crash a lot of -- came after the after the if that -- FaceBook IPO you just can't kill trades they're stuck with it.

And -- to unwind this stuff in the capital and they they probably need is suitors and that's -- we are right now okay.

They don't do get it -- capital will not survive the next 4048 out.

Okay took could be Citadel must -- and then we're -- we're still.

Wonder whether or not this financing deal with JPMorgan will go fizzles of the two big things -- you want to add anything in the go to Roberts Peter Kaplan here for second get his perspective that you can come back on a chart.

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