(Reuters) - Knight Capital Group (>> Knight Capital Group Inc.) reported a third-quarter net loss due to a glitch on August 1 that forced the electronic trader to take on additional investors to avoid bankruptcy.

Knight said on Wednesday that its loss amounted to $389.9 million, or $6.30 a share, compared with year-earlier earnings of $26.9 million, or 29 cents a share.

Stripping out all one-time costs, Knight said it had earned 1 cent a share, hurt by shaken confidence in the firm and by soft market conditions, with U.S. equity volumes and volatility at their lowest levels since the second quarter of 2007.

The net results included $461.1 million in losses associated with the glitch on August 1, when Knight, one of the biggest executors of stock trades in the United States, went live with new software that had been improperly installed.

The new software conflicted with old code that was to have been deleted, unleashing a flood of orders to the New York Stock Exchange, unrestricted by volume caps, and leaving Knight with a massive position it had to unload at a loss.

Days later, with the future of Knight in jeopardy, several companies stepped in with a $400 million investment to keep it afloat. The investors included Blackstone Group LP (>> The Blackstone Group L.P.), Getco and financial services companies TD Ameritrade Holding Corp (>> TD Ameritrade Holding Corp.), Stifel Nicolas (>> Stifel Financial Corp.), Jefferies Group Inc (>> Jefferies Group, Inc.) and Stephens Inc.

(Reporting by John McCrank in New York; Editing by Lisa Von Ahn)

By John McCrank