Owner
Post by Franko10 ™ on Mar 31, 2005 9:17:16 GMT -5
--Just another speculation, all in my wild imagination of course. This should put you all to sleep real fine;)
When foreign governments default on their loans, from Citi and others, Citi has a tendency to take positions in companies inside that country AND refinance, or further finance, the governments defaulted debt. If they do not do this, they will certainly lose all of the money on the loan that has defaulted. In this way, they are able to take ownership in tangible assets and at least hold a stake in something of value.
In the case of CMKX, perhaps Knight was the "foreign government" (for ref purposes only), who had tremendous debt due to their high leverage against penny stocks like CMKX. Let's say knight could not "cover" that debt (buy-in) so Citi did what they have always done for "foreign governments", that is "take a piece" of the assets of the defaulting entity instead of losing the entire loan value and bankrupting the country (company).
I believe Knights derivatives business, which Citi purchased for a song, was a high performing business for knight (although the jury is still out on how they derived that revenue). Why sell it?
For this speculation, it does not matter if Knights derivatives business was the unit that sold all the NSS, Citi got what they were after through leverage on mounting Knight debt, all IMHO and for fun
In his comments on the Citigroup purchase,
Thomas M. Joyce, Chief Executive Officer and President of Knight Trading Group, said, "Knight made significant improvements to its options business since it was acquired in 2000, adapting to the dynamic options market by increasing efficiencies and introducing new products." Mr. Joyce continued, "Knight is now a significant market maker in the U.S. with profitable operations, a strong brand and industry-leading technology and trading expertise. Ultimately, the hard work of Knight's employees transformed our options business into the attractive asset for Citigroup that it is today."
And here’s a nice little prize Citi received with the deal “Citigroup did purchase Knight's membership rights on the exchange."
JERSEY CITY, N.J., Dec 10, 2004 /PRNewswire-FirstCall via COMTEX/ -- Knight Trading Group, Inc. (Nasdaq: NITE) today announced the closing of the sale of Knight's Derivative Markets business to a subsidiary of Citigroup, Inc. (NYSE: C). The sale was effective as of the close of business on 12/9/04 for approximately $237 million in cash.
Here’s some brief info about Knight dealing with Citi, SB,
www.smithbarney.com/research/disclaimer/NITE.html
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within ... from KNIGHT TRADING.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from KNIGHT in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following company(ies) as investment banking client(s): KNIGHT .
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-investment-banking, securities-related: KNIGHT TRADING.
From the Knight Q4 released January 20, as you can see, the Citigroup purchase of their Derivative business gave a nice little punch to Knights Q4 04’<br>http://www.knighttradinggroup.com/MediaCenter/PressReleases.asp?releaseID=664599
Be sure to take a look at this volume data,
OTC Bulletin Board and Pink Sheet shares traded (in millions) Nah, let’s spell it out clear
2003 305,303,000,000
2004 1,349,856,000,000
Q4 03’ 135,201,000,000
Q4 04’ 358,910,000,000
Seems like Knight stepped up the penny volume a bit, don’t you think?
And why was it again that Knight just decided to sell a high performing core segment of their business? -lol
Per Knight, January 05’ - The gain on the sale of the Derivative Markets business, net of transaction costs and taxes, was approximately $80.9 million, or $0.70 per diluted share, in the fourth quarter of 2004. Additionally, in the fourth quarter, through the date of the sale, the Derivative Markets business segment reported a gain from its operations, net of taxes, of approximately $5.0 million, or $0.04 per diluted share. In total, during the fourth quarter, the company had net income from discontinued operations of $86.0 million, or $0.74 per diluted share, from its Derivative Markets business segment. [/color]
How about this line from Knights Q4 04’ report?
Liabilities Securities sold, not yet purchased, at market value $221,420,569
And Knight seems to pay a nice stipend to its “order flow” partners,
Payments for order flow-Under EXPENSES - LOL
Q4 04’ $9,215,539
Q4 03’ $10,175,253
2004 $36,632,317
2003 $32,178,913
And what about Knights Deephaven Capital Management fund (err HEDGE FUND).Well, Knight loves it. Referring to the previous link, you would think they have just discovered the cure for the commongold and diamonds and stuffium cold.
But, did you notice they never call it a “hedge fund”?
They say, “Deephaven remains a prudent place to keep a portion of our cash while we seek strategic investments."[/color] -LOL
“On January 1, 2005, Knight invested an additional $100 million in the Deephaven funds, bringing the total corporate investment to $315 million.”<br>
"Deephaven produced impressive results this quarter as both a business segment and a corporate investment, contributing a total of $0.16 to Knight's earnings per diluted share," Mr. Joyce said. "We have always been confident that we have the right people in place to make our Asset Management business a success. Deephaven's results reflect the strong operating leverage and earnings power of more than $3 billion of assets under management. Furthermore, Deephaven remains a prudent place to keep a portion of our cash while we seek strategic investments."
During the fourth quarter of 2004, there was a net inflow of approximately $84 million in assets under management. The company's investment in the Deephaven funds returned $9.0 million pre-tax during the fourth quarter of 2004, up from pre-tax earnings of $8.8 million in the fourth quarter of 2003. At the end of the fourth quarter of 2004, the company had $215.3 million invested in the Deephaven funds.
-------------------------------
How about this little accounting shift for Knight in Q4 04?
“Effective in the fourth quarter of 2004, the Company instituted a new segment reporting format to remove from its operating business segments all corporate overhead expenses and investment income earned on strategic investments and our corporate investment in the funds managed by our Asset Management segment (the "Deephaven Funds"). Prior to this change, corporate overhead expenses and investment income earned on strategic investments were allocated to the operating business segments based upon the Company's allocation methodologies, generally based on each segment's respective usage or other appropriate measure.”<br>
BELOW, knight competitor, Merill, has a different view on the whole Deephaven Chior Boy!
Merrill Lynch downgraded Knight Trading (NITE ) to neutral from buy. Analyst ... says EPS is under pressure from a sharp fall in equity volume, less options trading, and weak performance at the Deephaven hedge fund unit. He thinks a low-volume environment could persist throughout the summer.
businessweek.com/investor/content/jun2004/pi20040616_4029_pi006.htm
I could go on an on, but it's already too long ...too many GOOGLE hits to DD for this duo – LOL
Time to wrap up this laughable speculation.
In this latest speculation -lol,
1. Knight cannot pay the debt to cover the NSS CMKX shares that are being ordered by the brokerages and the SEC to cover. Knight cannot only cover their NSS, they are incurring recurring fees for their uncovered short position.
2. Let's say Citi was the bank that was backing Knight in their risk obligations. Knight was "ordered" ordered to buy in (probably as a result of the divvies), and could not do so because Citi shut off the tap.
3. Lucky for Knight, Citi views them as just another 3rd world country and agrees to take their best performing business unit, the derivatives business and assume "certain debt" (check the PR) in the deal.
4. Citi cuts Roger Glenn loose from their roster to foster the deal. (Yea, he's an M&A master). Citi gets pulled off the E&A client list from the website.
5. Fast forward to now-lol Citi steps up to the plate (remember, if they didn't buy knight, they would not have received any cash back on the defaulted loan).
6. Citi says to UC, "Hey UC, you da man!"-lol Rather than lose all our cash on that Knight loan, "hows about we give you one of our special deals?
We'll give you a few hundred million/billion bucks, you raise the OS to Knight NSS position, and we'll buy every share of Knight NSS at a reasonable price that you set.
You and your shareholders get some cash and we don't lose Knights loan debt to a scandal. In fact, we get a stake in your great company. BTW, we want 300B real shares (August 14, 2004)
How's that sound UC? BTW, you got the goods right? - lol
And what about the other MM's that did the dirty work for the offshore hedge etc.? Well, they just contribute to the squeeze. You see, there can only be one king, and Citi would be first a bat.
IBM ensures the "others" come into line when required.
Just another speculation, all in my wild imagination of course.
Have a nice “Knight”
When foreign governments default on their loans, from Citi and others, Citi has a tendency to take positions in companies inside that country AND refinance, or further finance, the governments defaulted debt. If they do not do this, they will certainly lose all of the money on the loan that has defaulted. In this way, they are able to take ownership in tangible assets and at least hold a stake in something of value.
In the case of CMKX, perhaps Knight was the "foreign government" (for ref purposes only), who had tremendous debt due to their high leverage against penny stocks like CMKX. Let's say knight could not "cover" that debt (buy-in) so Citi did what they have always done for "foreign governments", that is "take a piece" of the assets of the defaulting entity instead of losing the entire loan value and bankrupting the country (company).
I believe Knights derivatives business, which Citi purchased for a song, was a high performing business for knight (although the jury is still out on how they derived that revenue). Why sell it?
For this speculation, it does not matter if Knights derivatives business was the unit that sold all the NSS, Citi got what they were after through leverage on mounting Knight debt, all IMHO and for fun
In his comments on the Citigroup purchase,
Thomas M. Joyce, Chief Executive Officer and President of Knight Trading Group, said, "Knight made significant improvements to its options business since it was acquired in 2000, adapting to the dynamic options market by increasing efficiencies and introducing new products." Mr. Joyce continued, "Knight is now a significant market maker in the U.S. with profitable operations, a strong brand and industry-leading technology and trading expertise. Ultimately, the hard work of Knight's employees transformed our options business into the attractive asset for Citigroup that it is today."
And here’s a nice little prize Citi received with the deal “Citigroup did purchase Knight's membership rights on the exchange."
JERSEY CITY, N.J., Dec 10, 2004 /PRNewswire-FirstCall via COMTEX/ -- Knight Trading Group, Inc. (Nasdaq: NITE) today announced the closing of the sale of Knight's Derivative Markets business to a subsidiary of Citigroup, Inc. (NYSE: C). The sale was effective as of the close of business on 12/9/04 for approximately $237 million in cash.
Here’s some brief info about Knight dealing with Citi, SB,
www.smithbarney.com/research/disclaimer/NITE.html
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within ... from KNIGHT TRADING.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from KNIGHT in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following company(ies) as investment banking client(s): KNIGHT .
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-investment-banking, securities-related: KNIGHT TRADING.
From the Knight Q4 released January 20, as you can see, the Citigroup purchase of their Derivative business gave a nice little punch to Knights Q4 04’<br>http://www.knighttradinggroup.com/MediaCenter/PressReleases.asp?releaseID=664599
Be sure to take a look at this volume data,
OTC Bulletin Board and Pink Sheet shares traded
2003 305,303,000,000
2004 1,349,856,000,000
Q4 03’ 135,201,000,000
Q4 04’ 358,910,000,000
Seems like Knight stepped up the penny volume a bit, don’t you think?
And why was it again that Knight just decided to sell a high performing core segment of their business? -lol
Per Knight, January 05’ - The gain on the sale of the Derivative Markets business, net of transaction costs and taxes, was approximately $80.9 million, or $0.70 per diluted share, in the fourth quarter of 2004. Additionally, in the fourth quarter, through the date of the sale, the Derivative Markets business segment reported a gain from its operations, net of taxes, of approximately $5.0 million, or $0.04 per diluted share. In total, during the fourth quarter, the company had net income from discontinued operations of $86.0 million, or $0.74 per diluted share, from its Derivative Markets business segment. [/color]
How about this line from Knights Q4 04’ report?
Liabilities Securities sold, not yet purchased, at market value $221,420,569
And Knight seems to pay a nice stipend to its “order flow” partners,
Payments for order flow-Under EXPENSES - LOL
Q4 04’ $9,215,539
Q4 03’ $10,175,253
2004 $36,632,317
2003 $32,178,913
And what about Knights Deephaven Capital Management fund (err HEDGE FUND).Well, Knight loves it. Referring to the previous link, you would think they have just discovered the cure for the common
But, did you notice they never call it a “hedge fund”?
They say, “Deephaven remains a prudent place to keep a portion of our cash while we seek strategic investments."[/color] -LOL
“On January 1, 2005, Knight invested an additional $100 million in the Deephaven funds, bringing the total corporate investment to $315 million.”<br>
"Deephaven produced impressive results this quarter as both a business segment and a corporate investment, contributing a total of $0.16 to Knight's earnings per diluted share," Mr. Joyce said. "We have always been confident that we have the right people in place to make our Asset Management business a success. Deephaven's results reflect the strong operating leverage and earnings power of more than $3 billion of assets under management. Furthermore, Deephaven remains a prudent place to keep a portion of our cash while we seek strategic investments."
During the fourth quarter of 2004, there was a net inflow of approximately $84 million in assets under management. The company's investment in the Deephaven funds returned $9.0 million pre-tax during the fourth quarter of 2004, up from pre-tax earnings of $8.8 million in the fourth quarter of 2003. At the end of the fourth quarter of 2004, the company had $215.3 million invested in the Deephaven funds.
-------------------------------
How about this little accounting shift for Knight in Q4 04?
“Effective in the fourth quarter of 2004, the Company instituted a new segment reporting format to remove from its operating business segments all corporate overhead expenses and investment income earned on strategic investments and our corporate investment in the funds managed by our Asset Management segment (the "Deephaven Funds"). Prior to this change, corporate overhead expenses and investment income earned on strategic investments were allocated to the operating business segments based upon the Company's allocation methodologies, generally based on each segment's respective usage or other appropriate measure.”<br>
BELOW, knight competitor, Merill, has a different view on the whole Deephaven Chior Boy!
Merrill Lynch downgraded Knight Trading (NITE ) to neutral from buy. Analyst ... says EPS is under pressure from a sharp fall in equity volume, less options trading, and weak performance at the Deephaven hedge fund unit. He thinks a low-volume environment could persist throughout the summer.
businessweek.com/investor/content/jun2004/pi20040616_4029_pi006.htm
I could go on an on, but it's already too long ...too many GOOGLE hits to DD for this duo – LOL
Time to wrap up this laughable speculation.
In this latest speculation -lol,
1. Knight cannot pay the debt to cover the NSS CMKX shares that are being ordered by the brokerages and the SEC to cover. Knight cannot only cover their NSS, they are incurring recurring fees for their uncovered short position.
2. Let's say Citi was the bank that was backing Knight in their risk obligations. Knight was "ordered" ordered to buy in (probably as a result of the divvies), and could not do so because Citi shut off the tap.
3. Lucky for Knight, Citi views them as just another 3rd world country and agrees to take their best performing business unit, the derivatives business and assume "certain debt" (check the PR) in the deal.
4. Citi cuts Roger Glenn loose from their roster to foster the deal. (Yea, he's an M&A master). Citi gets pulled off the E&A client list from the website.
5. Fast forward to now-lol Citi steps up to the plate (remember, if they didn't buy knight, they would not have received any cash back on the defaulted loan).
6. Citi says to UC, "Hey UC, you da man!"-lol Rather than lose all our cash on that Knight loan, "hows about we give you one of our special deals?
We'll give you a few hundred million/billion bucks, you raise the OS to Knight NSS position, and we'll buy every share of Knight NSS at a reasonable price that you set.
You and your shareholders get some cash and we don't lose Knights loan debt to a scandal. In fact, we get a stake in your great company. BTW, we want 300B real shares (August 14, 2004)
How's that sound UC? BTW, you got the goods right? - lol
And what about the other MM's that did the dirty work for the offshore hedge etc.? Well, they just contribute to the squeeze. You see, there can only be one king, and Citi would be first a bat.
IBM ensures the "others" come into line when required.
Just another speculation, all in my wild imagination of course.
Have a nice “Knight”
