Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of embattled Knight Capital Group (NYSE: KCG) popped 14% today after fellow trading firm Getco Holding offered to merge with it.

So what: The cash-and-stock proposal values Knight Capital at $3.50 per share and represents an 18% premium to its closing price on Tuesday. Of course, the stock has been surging since Friday on reports that Knight had spoken to at least two rivals regarding the purchase of its market-making business, suggesting that Getco's offer is far from a done deal.

Now what: Getco, which already owns about 30% of Knight Capital, said the merger would be a two-step process in which 242 million new shares are issued, followed up by a tender offer for an additional 154 million shares. "[B]y structuring the transaction with both cash and equity components, Knight shareholders are able to realize an immediate return on investment, as well as preserve the opportunity to participate in the future growth of the combined company," Getco CEO Daniel Coleman wrote in a letter to Knight. So while I'd expect competing bids in the upcoming days, using today's surge to take at least some dough off the table seems like a prudent move for Knight shareholders.

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