Well, that or they would go crying to the exchange operators, and if they're influential enough, they'll get their sales of Google at $20/share reversed.

We would see a lot less of these disruptions if exchanges would make everyone live with the stupid exchanges their computers made.

They do. Knight didn't get its trades busted.

"On the same day the company's stock plunged 33 percent, to $3.39; by the next day 75 percent of Knight's equity value had been erased."

So in the example you linked, a computer algorithms went crazy, and anybody invested in Knight Capital got hosed ... as did anybody elsewhere in the market that reacted to that instability. Not exactly a convincing argument that it can't or won't happen again potentially on a much larger scale. You basically confirmed my point.

Your original point was:

"The market has changed in a way that an overwhelming number of external factors can have a negative (or positive) impact on that company's share price"

Knight Capital loosing a ton of money was not due to an external factor. It was due to an internal factor. The fact that they (apparently?) accidentally deployed a bunch of test code to production. Oops!

My point was that external factors can have an impact on the stock price of an company in ways that previously hadn't been possible, and I cited HFT as one of those factors. You cited Knight Capital whose "internal factor [...] (apparently?) accidentally deployed a bunch of test code to production" resulted in "trading activities [that] caused a major disruption in the prices of 148 companies listed".

So yes - in this case, the internal factor of Knight running a flawed algorithm turned into a very real external factor for those 148 companies, as well as anybody else whose trading was impacted along the way.

The share price for those 148 companies barely moved.

Yet Knight Capital's share price never recovered. Say instead of KCG it was JPM, operating without the usual risk concerns because they've got assurance from the government of support. Should investors or taxpayers be okay with such an "internal issue" destroying part of their net worth? And wouldn't a too-big-to-fail company have a broader impact on the entire market if such a think were to happen? It's kind of the whole concept behind too-big-to-fail that they would.