MF Global Shares Got Crushed: What You Need to Know

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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 financial broker MF Global (NYS: MF) were getting slammed by investors for a second day in a row, falling as much as 42% in intraday trading on massive volume.

So what: Following on the heels of yesterday's disastrous earnings release, reports were swirling today that MF Global hired Evercore Partners (NYS: EVR) to "explore strategic options," which is generally code for selling the company. At the same time, The Wall Street Journal said that Standard & Poor's may one-up Moody's (NYS: MCO) and cut MF's credit rating to junk status.

Now what: Generally when a company says that it's going to sell itself, investors get excited about the potential takeover premium and boost the stock. Generally. In the case of MF Global, investors are clearly looking at the potential sale as a white flag that CEO Jon Corzine is waving, conceding that his big-risk appetite is not going to end up turning MF in to the next Goldman Sachs (NYS: GS) . Worse still, it could simply be the company realizing that it is on shaky financial footing and desperately looking for a white knight.

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