The losses are greater than the company’s revenue in the second quarter of this year, when it brought in $289 million.
The company said the problems happened because of new trading software that had been installed. The event was the latest to draw attention to the potentially destabilizing effect of the computerized trading that has increasingly dominated the nation’s stock markets.
Until this week, Knight had been one of the biggest beneficiaries of the evolution of the market, helping clients trade in and out of stocks at high speeds.
The glitch occurred over a span of 45 minutes, during which Knight Capital lost $10 million per minute. The stock tumbled 30% yesterday and is down 60% today to a low of $2.75/share.
For a specific glance at the stocks that were affected yesterday, check out this blog post. The blog post begins appropriately “What follows should strike you as crazy. If it doesn’t, read it again, because it is.”
Incredible how much value can be wiped out in a company because someone on the High Frequency Trading desk didn’t do his/her homework.