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KBW analyst Niamh Alexander on how Knight Capital will raise money to strengthen its capital base.
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-- to my next guest says the best thing for ninety due to maximize shareholder value right now -- find a buyer as soon as possible joining me right now as need Alexander analyst.
At KBW -- I don't know if you're listening to the top of our show but we had Sean -- time.
Who downgraded the stock once again and he said.
That he thinks that you know the -- they can do at this point.
Is to raise a hundred million dollars in equity capital but that's not gonna get the job done he doesn't see -- -- out -- do you agree with that characterization.
I think it's it's tough but you know I do feel there's a lot of value in the businesses there especially in the broker relationships but I I do feel that there are probably buyers -- it.
-- hundred million dollars in equity I still see -- happening on the public market so -- have to do -- with -- private and very private would be interested to hear diluting existing shareholders even more but I feel that you know they've got.
You know very very tight window to try and sell this thing but they're probably are buyers in the probably already in discussion with -- yes I have not today already.
Yeah it -- -- -- a downgrading the stock have been downgrading the debt UC six potential suitors out there is that right Goldman Sachs JPMorgan.
Interactive brokers Cantor Fitzgerald Jefferies and Credit Suisse.
Yeah they're the six -- listed but you know effects since that is bothers also potentially at a price the companies that might be president of space that are already.
-- -- in trading I think you've seen news headlines already and sourcing the super -- top -- -- or some of those guys that have moved increasingly into the market making space is -- up there another group that I didn't even less but I think that bigger.
That the more obvious buyers would be that they dealers that they are what capitalize some of them could rebounds or trading technology expertise and get a bunch of connectivity -- these retail brokers.
Thousands of retail broker activities that.
You know -- it's done -- as though these relationships over the yourself there's value there there's a lot of other little businesses within night to that have a lot of bodies and again we -- right now.
Time is of the essence that have to announce something it not tomorrow night them by the end of the weekend because it today partly customers are not deny much business -- -- -- -- Is this nicely to -- three fault or is -- a bigger story we should be looking at here whether it's counter -- risk.
Is it and I client funds other firms out there that could have similar problems down the -- -- what's the bigger story in your mind.
But the biggest RA is made -- -- it should be a little bit better capitalized are.
The bigger story is you know is -- clients are as a prop trading -- you know when you have such a dearth of liquidity in the markets.
You know -- kind of you know if you.
A few miscellaneous program errors -- run out or whatever was the -- but you know -- come drives this distortion and the underlying stock prices so.
You know they'll need a bigger classes -- will be revisited at a later time but in terms of his or counterparty risk is our.
More systemic issues I -- don't think so I mean this trade.
If they think they -- their off says there Don there without there's no open source there's not clients that -- -- -- -- anything like that that the officer Don and markdown yeah what you but I nothing at our.
Is you know OK you've got these relationships water the other businesses.
Welcome me by today's marceca built up on Monday morning and say okay this is -- maybe -- new name on the Darby is so got a very viable businesses on the customers that maybe star running back allow more quickly than.
You know right now the programme -- by the way do you believe.
What they -- -- a press release that it was a software glitch they installed some software that you know obviously there was a problem with that they've removed did and and that's the source the problems at that because Charlie Gasparino was saying earlier that there's a lot of people that think there's more to destroy what do you think.
And -- this could be anything snow could be programmed error it could mean profit could be science -- it could mean that he's paying and you know I think I think actually to have to kind of right now.
From a legal perspective say as little as it possibly can yeah RE -- thank you for your perspective -- appreciate it thanks.
OK and.
