KCG Holdings (KCG) to be acquired by Virtu Financial (VIRT)

KCG Holdings (KCG) to be acquired by Virtu Financial (VIRT) for $20.00/share in cash or approx. $1.4 bln

 

KCG was born out of the merger of Knight Capital and Getco, two pioneers of using computer technology for rapid-fire trading who joined forces in 2012 after a trading glitch nearly put Knight out of business.

The move comes as persistently low levels of volatility in financial markets are squeezing industry players. High-speed groups thrive during times of heavy trading and high volatility, with the period around the financial crisis having been the boom time.

Virtu trades primarily for its own account, like Getco, whereas KCG also has big business trading for clients — part of the Knight arm thought to be attractive to Virtu. It is one of the largest players in wholesale trading where companies execute trades for retail houses such as Charles Schwab and TD Ameritrade.

** charts before **

 

KCG Holdings (KCG) reported earnings on Thur 20 Oct 2016 (b/o)

JERSEY CITY, New Jersey - October 20, 2016 - KCG Holdings, Inc. (KCG) today reported a consolidated loss of $11.2 million, or $0.13 per share, for the third quarter of 2016. The third quarter consolidated loss includes an income tax benefit of approximately $6.1 million or $0.07 per share primarily related to tax deductions and credits generated from the company`s software development activities.

Third Quarter Highlights

Averaged approximately 30 percent market share of retail SEC Rule 605 U.S. equity share volume among the leading market makers during the quarter

Averaged approximately 16 percent market share of U.S. ETF share volume from market making and agency-based trading activity during the quarter

Completed the migration of KCG MatchIt to a new matching engine

Acquired Neonet Securities AB, an independent agency broker and execution specialist based in Stockholm, Sweden

Named Mike Blum Chief Technology Officer effective October 1, 2016