Knight Capital Group Inc. (NYSE: KCG) -- reportedly discussing with at least two different competitors a deal to sell its market-making unit -- would agree to such a transaction only in the event it would create value for its clients and shareholders, company Chairman and CEO Thomas M. Joyce said in an internal memo Saturday.
"To that end, our board of directors and management team regularly consider opportunities that are potentially strategic or collaborative in nature to enhance shareholder value and improve our offering to clients," Joyce said in the memo to employees, which was seen by Reuters.
The memo apparently was circulated in response to a report in the Wall Street Journal that the electronic-trading firm has been approached by rivals Getco LLC and Virtu Financial LLC about its market-making unit, which employs computer models to match buy and sell orders in equities and options. Knight executes about 10 percent of U.S. orders in those markets, according to Reuters.
Knight's third-quarter nonearnings report last month showed a loss of $389.9 million, most of it caused by a disastrous software glitch on Aug. 1. Because of the glitch, the company was compelled to seek new investors.
"Given our recapitalization, rapid client re-engagement, and rebound in trade volumes, there is no need for Knight to pursue a partnership, transaction, or any other undertaking," Joyce said in the memo seen by Reuters. "We would only move forward with such an initiative if it makes strategic sense for our shareholders and our business."
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Besides being a top U.S. stock and options market maker, Knight operates bond and foreign-exchange trading platforms, among its other lines of business.
If Knight has something interesting to say anytime soon, then the company could find market operators all ears around the time of its annual analyst and investor meeting on Dec. 3.
Knight's share price fell 4 cents, or 1.58 percent, to $2.49 in the holiday-shortened session Friday.