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Knight Capital: A Turnaround Story

Knight Capital Group used to be one of Wall Street’s most disreputable brokerages. Even Cramer said he was cautious when dealing with Knight, back when he ran his hedge fund. But that all changed in 2002 when CEO Tom Joyce took over. The Merrill Lynch veteran brought with him that company’s client focus, dumped the cowboy culture and modernized the trading platforms. The results have been stunning.

Knight just delivered a much-better-than-expected quarter, beating the Street’s earnings estimates by 19 cents a share, and is now sitting on about $5 a share in cash. Joyce and company are taking market share, too, using this downturn to elbow in on competitors. In the fourth quarter, the brokerage held the most share in NYSE, AMEX, Nasdaq and Bulletin Board stocks. And Knight’s still growing.

Cramer and Joyce, old Harvard friends, talked in depth on Wednesday to give investors a better look at the company. Watch the video for the CEO’s take on Sirius XM Radio trading, Bernie Madoff, the fall of Merrill Lynch, stock buybacks and insider selling.





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