Knight Capital shares boosted by sale rumours

Shares of Knight Capital rose sharply Monday after a financial analyst upgraded the company from underperform to market perform status.

The catalyst for the change was a report in The Wall Street Journal this past weekend, which said Knight Capital has been approached by at least two parties to buy the market-making division of the business.

It seems a change in ownership would be welcome, after the company caused a major technical glitch this summer that flooded the market with unintended trades. The resulting trading losses threatened the company’s survival, and Knight got a $400 million lifeline from a group of investors to aid its recovery.

Read: Knight Capital receives lifeline after trading error

The company’s stock rose 25 cents, or 10%, to $2.74 in midday trading yesterday. This past year, the stock had traded as high as $13.59 but had fallen to $2.58 by the beginning of August.

It also reported a Q3 2012 loss, having paid out millions due to the glitch. Excluding the losses, though, it managed to post a small profit and saw its stock rise almost 11% in premarket trading.