Knight Capital signed a $400 million deal to cover most of its losses from a trading glitch.
NEW YORK (CNNMoney) -- After suffering a massive loss from a trading glitch last week, Knight Capital Group has signed a rescue agreement with investors worth $400 million.
Knight Capital (KCG) said that the investors are buying preferred stock convertible to 267 million common shares of the company, according to a document filed with the Securities and Exchange Commission on Monday.
But the deal didn't help the high-speed trader's stock, which lost one-third of its value in premarket trading. Last week, Knight lost about 60% of its value over a three-day period last week, despite a robust rally on Friday.
The firm lost $440 million after a trading software snafu on Aug. 1 that sent numerous erroneous orders in NYSE-listed securities into the market, according to the company filing.
Some 150 companies listed on the NYSE were affected.
Knight Capital plays a key role on Wall Street by acting as a middleman in the markets, completing investors' orders to buy and sell stocks.
The company did not name the new investors in its SEC document.
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