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Gasparino: Scottrade Part of Group Investing in Knight Capital

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  • Description

    FBN's Charlie Gasparino on Scottrade's stake in Knight Capital.

  • Duration 3:44
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After Knight capital surviving a near implosion just two weeks ago or Charlie Gasparino reporting that the firm managed to snare yet another may investor to bail the -- joins us now exclusive details in this.

-- remember six firms are essentially ended -- Blackstone.

Said BlackRock yeah.

Stiefel Nicholas Stevens Jefferies was the other guy there's one other out there.

But anyway whoever that guy is Ed one more and final -- the list and that's and that's Scott -- now here's the -- in the about the story that is that I mean.

-- -- -- There's no -- Scott trade being part of the investment although we should point out they were not -- this -- an undisclosed previews and disclosed to the fox does network.

Broke the story last item adding to -- today.

This is how Wall Street works this is a sweetheart deal sweetheart deals all those investors.

Are gonna make a lot of money on this deal remember it's a convertible deal to bail them out that you 400 -- -- -- -- coming in.

They wanted to throw a bone to Scott -- Wednesday night capital wise that could tonight capital receives order flow for Scott trade.

They convinced all the other investors cut the -- give up some we your shares.

Where they're gonna make a lot of money Mary -- now why would the other ones give up their shares to help Scott trade.

A Wall Street is such an incestuous business all the other firms do business with Scott street Stiefel Nicholas perfect example.

Provides -- gets order flow from Scott trade matches buyers and so -- this country.

That's how Wall Street works.

One of the interesting things about this story as we've been reporting in the terms of nights knights of the C the -- -- -- capital and he's just how much.

Real old investors got screwed on this deluded big time now investors lost in in this deal 70% of our holdings.

On the market cap went down about 700 million dollars on this because of this massive dilution but who's making out.

All these other players now including -- ratings cut in on the deal.

-- night wanted essentially pay off somebody that's helped that in the past of the supply order flow.

To nitrate there's a 618.

Scapegoat for second.

TD Ameritrade TD Ameritrade Blackstone stifle Stevens.

Problem -- they'll get a slice of the -- isolated and they cut.

These guys in on the side.

Undisclosed until fox is that workers broke -- how did you find me not to disclose her sources but why didn't we know about -- trade without about the first obvious I that's a good question why didn't they disclose -- and I I think the reason why they didn't disclose it.

Is because you know one of the things that Wall Street likes to keep secret and you know why I I do these stories.

Is just how one hand you know helps the -- to -- sort of inside incestuous nature where they're kind of all in it for themselves to make money.

Not necessarily for the small investor if there's one thing I will say that this story should show every small investor.

Is buyer be Wear out yeah these guys will help each other.

They won't but militarily if -- won't and so they help you and this is just one way.

That they cut this this Fiske and his country did not have to be part of this thing they continent at the last minute because they want to -- pay off.

How a firm that has it basically you know helped -- nitrate Knight capital in the past.

You know and I capital was on when it was at the end of its -- memory and a week of August.

Of the oval whispers I believe it was a switch and adjusting chart yeah cheers keep going down we'll talk about that on TV one reason why that's going on.

You don't Scott -- kept sending order flow why shares going down more dramatically than -- this is that kind of pretty interest to move.

I think because a lot of these players like Scott trade.

Are -- that the feeling is they're gonna exercise their convertible deal which could come very soon there and they can make an quick -- that's what they wanted to.

Strategy so exciting finish -- up belly.

-- there's always a twist and another twist and another -- Jonathan.

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