From: Long Investing Ideas from Seeking Alpha - 12:22pm - August 9, 2012ByRed Acre Investments:The recently announced rescue financing deal for Knight Capital Group (KCG) serves as an object lesson for investors in speculative biotech companies such as Talon Therapeutics (TLON.OB) and Navidea Biopharmaceuticals (NAVB). The capital structure of the firm, taking into account issued and issuable preferred stock, warrants and convertible debt, should be examined carefully before investing. Background After a software "glitch" caused KCG to vaporize $440 million dollars in 45 minutes of haywire trading, Knight found itself out of cash with a 40% hole in it's working capital and on the brink of bankruptcy. Management held marathon negotiation sessions over the weekend and ultimately secured $400 million in financing via a convertible preferred share offering to a consortium of investors.The $400 million restores 90% of KCG's pre-glitch cash, fixes the w...
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Source: http://ewallstreeter.com/knight-capital-s-rescue-deal-a-lesson-for-biotech-investors-5454/
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