After being silent for most of the week, Knight Capital Group CEO Tom Joyce spoke to the Wall Street Journal today. He emphasized the firm’s rebound in business activity since a trading glitch stung the firm with a $440 million loss. The interview will help shift the focus toward Knight’s future, not its painful recent past.
Knight’s communications got off to a good start the day after its trading went haywire, but it then went quiet. By remaining silent, Knight lost control of its narrative and opened the door for others to pursue their own agenda in the media.
Bloomberg and the WSJ on Monday, for example, reported that Citadel, a fierce Knight rival, had proposed a financial lifeline to Knight that would have been less dilutive to shareholders than the deal that Knight accepted from an investor group. In response, Knight offered a statement, which was buried in paragraph six of the Journal’s article.
And the following day, the WSJ revealed that Knight’s computer error initially saddled the firm with $7 billion in unwanted shares, a much higher figure than previously known, suggesting that Knight’s situation was more dire than it acknowledged. Knight did not comment.
This coverage gave the impression that Knight was still reeling from the crisis and perhaps had other bad news ahead. By contrast, today’s WSJ interview with Joyce enabled Knight to focus on its recovery, pointing out that its share of stock trading is quickly returning to pre-crisis levels:
Knight on Wednesday retook market-leading positions in the trading of shares included in the Russell 2000 index and exchange-traded funds, though its presence in blue-chip stocks remained below typical levels, according to data from Thomson Reuters Corp.
“I think we’ll be close to 100% within a week,” Knight Chief Executive Thomas Joyce said Thursday. “Given what our clients have witnessed over the past week, we’re unbelievably encouraged by how quickly they’re coming back.”
Every company that’s been through a crisis is eager to the turn the page and move on. Knight’s experience this week shows how difficult that can be until the CEO addresses the media. With an independent report on the trading loss due in several weeks, and possible action by regulators, Knight has not seen the end of its crisis. But it has begun to take control of it.