CHICAGO, Aug. 8, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Knight Capital Group Inc. (NYSE:KCG), The Blackstone Group LP (NYSE:BX), Stifel Financial Corp. (NYSE:SF), TD Ameritrade Holding Corporation (NYSE:AMTD) and Jefferies Group Inc. (NYSE:JEF).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Tuesday's Analyst Blog:
Investors Rescue Knight Capital
Knight Capital Group Inc. (NYSE:KCG), which was on the verge of bankruptcy after recording trading losses of $440 million, was resurrected after successfully receiving $400 million capital infusion from a group of investors. Impelled by a software failure on August 1, the company recorded losses, which led to a 75% drop in its share prices last week.
Knight Capital came up with the sale of preferred stock which will be convertible into approximately 267 million common shares at an average price of $1.50 per share. Such a move will dilute the holdings of its existing shareholders.
The group of investors who entered into the deal includes Getco LLC, an automated trading firm, The Blackstone Group LP (NYSE:BX), brokerage firms Stifel Nicolaus & Co., a subsidiary of Stifel Financial Corp. (NYSE:SF) and TD Ameritrade Holding Corporation (NYSE:AMTD). The group also includes the two investment banks – Stephens Inc. and Jefferies Group Inc. (NYSE:JEF).
About 73% of Knight Capital's stake will be held by the new group of investors once the preferred shares get converted into stock. Moreover, these shares will yield a dividend of 2% for the investors.
Under the terms of the deal, three board seats will be reserved for the investors' group. In a regulatory filing, Knight Capital announced two seats will be allotted to Blackstone and Getco's parent company – General Atlantic, while the third seat will be offered to Jefferies. Moreover, such rights will be retained by the investors till they have a minimum of 25% holdings of the preferred shares purchased.
Knight Capital, the largest U.S. provider of retail market-making in New York Stock Exchange and NASDAQ-listed stocks, buys and sells shares for clients. Through its market-making unit, the company also provides liquidity to equity markets by buying and selling stocks with its own capital to maintain the orderly activity.
As issuance of convertible securities requires shareholders' approval, Knight Capital's step might lead to shareholders' litigations in the current financial scenario. Moreover, troubles for the company might amplify if the Securities and Exchange Commission (SEC) confirms the violation of regulations.
Though the company is working hard to recoup losses and clients' confidence, legal issues will quadruple the troubles. Shares of Knight Capital currently retain a Zacks #5 Rank, which translates into a short-term Strong Sell rating.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
Share this article