E*Trade: A Bet Worth Making

E*Trade (ETFC) shares have suffered one of the greatest declines of all (non-bankrupt) financial service companies - a whopping 97% from pre-meltdown levels. (From the start of 2006 through the first half of 2007, ETFC was a $20+ stock.)

The verdict remains out on ETFC. Obviously the possibility (or probability?) of bankruptcy is priced in, as shares changed hands at $.66 on Thursday. However, the core brokerage business remains strong... if only management had had the foresight to have avoided banking and investments over the past five years.

Shares slumped Thursday amid the strong rally after a Citi analyst slapped a "sell" on the stock in the morning. The Citi analyst provided a price target of $.25/share. However, along with that bleak statement, he pointed out:

"E*Trade is a tale of two companies. On one hand, the retail brokerage operation is steady. The segment has averaged over $500M of annual operating earnings and 41% margins over the past five years. The institutional business, however, remains an albatross as a result of its $25.5B loan portfolio. While we believe current management is doing all they can to address the company's legacy balance sheet issues, the long-term viability of the company remains in doubt, in our view."
(Source: StreetInsider.com)

There are about 500 million ETFC shares outstanding, so theoretically, the brokerage-only component would be making $1/share per year and trade at $10-$20.

However, the institutional component, which focused on investing in mortage securities, threatens the viability of the company. ETFC hasn't reported a profit since 2007 as mark-to-market writedowns of assets have forced ETFC to take losses. However, management has proactively dealt with the losses and associated need for increased capital; they sold E*Trade Canada for over $500 million (after taxes) and sold a portion of their asset portfolio to private buyers.

They now seem well capitalized, and a recent stress test confirmed that conclusion. (Read the article here.) The analyst concludes that while ETFC would need more capital in a (harsher than realistic) immediate full-writedown scenario, it would be able to maintain a Tier-1 capital ratio if the writeoffs happen over a few quarters.

The wild card that could still significantly change things is ETFC's still-outstanding request for TARP funds. ETFC requested $800 million, which would cover all losses even in the aforementioned analyst's doomsday scenario.

The bottom line is that ETFC will do one of two things - go bankrupt, or go way, way up.

When it comes to the financial services sector, the most important thing now is survival. For the past year (or more), companies have written down assets repeatedly thanks to mark-to-market accounting. Assets have to be written down to prices they'd fetch on the open market, while in reality, many instruments have intrinsic value (based on interest payouts, etc.) above their current marked values. Eventually, these assets will be written up. Some firms will fail or be bought out before they have the opportunity to do this; others, whether due to good management or the government's good graces, will survive until the day they report a gain on their held assets.

Even ignoring any writing-up of ETFC's assets, if they can survive to the day that their non-brokerage business no longer impairs their results, the shares will skyrocket - eventually back to double-digit (dollars, not cents) territory. (Note: Seemingly ridiculous claim is based on $1/share brokerage-component earnings). However, current market pricing indicates that most investors don't think that will happen.

I find buying ETFC a bet worth making - The slim possibility of a 10- or 20-bagger makes the probability of bankruptcy worth betting against. I currently hold some shares, but I'm planning to add to my position if shares stay at current levels. ETFC shares are not for everyone, and I'd almost classify going long as closer to gambling than true Buffett-like investing... but I'm young and I like taking risks. I'm hoping that management can continue to bail water out of this sinking dinghy until the storm clouds have cleared.

Disclosure: long ETFC.

Comments

[ETFC Long:]

Great article. Saw this link on the Yahoo message board last night. It looks like they are ready to start lending again which should get them access to TARP funding:

https://mortgage.etrad...

Mar 13 08:10 AM

[ETFC Long:]

Here is that link again: mortgage.etrade.com/in...

Mar 13 08:15 AM

[ETFC Long:]

I give up. Can't post a link, but if you go to etrade.com click on the banking tab and then click on the mortgages link in the lower left of that page it will pop up.

Mar 13 08:18 AM

[Jim Rich:]

I don't believe any verdict was ever out. They've been well over well-capitalized levels for the entire year. The fact is that when 14% of your shares are allowed to trade short any companies stock price can suffer.

They've been a recovering company since the beginning of the current downturn. They were the first ones to admit on their own problems were ahead, and that allowed the Citi analyst in Nov 07 to call a chance of bankrupcy which forced them to take poorer terms on asset sales they were obviously already contemplating, which eventually went to Citadel. Citi has continued to rate them a sell or underperform the entire time since, so how is it they can again "start" coverage at a sell? Big surprise there, lol. New analyst is noted however, but who cares still Citi.

ETFC has rebuilt customer base to their highest levels, been proactive and made hard choices before the other banks admitted any problem. I'd much rather own ETFC than Citi. If Citi did make a profit the first two quarters this year it's because we gave it to them.

No company that has received TARP funds wants the restrictions that go along with them. ETFC doesn't really want that monkey by their side (earlier commercials aside). Tarp would like to force new loans at a time when ETFC is trying to move the existing off their books and said after 2nd quarter last year they were discontinuing. Unless Tarp also allowed only inter-bank short-term lending then I would hope ETFC would have a new "do not touch" sign posted regarding TARP.

Go ETFC.

Mar 13 08:43 AM

[jimocarroll:]

This is somewhat of a non-sequitur, but I am currently an eTrade account holder / customer. I did not choose eTrade.

I chose a different company whose name I don't even recall, which was acquired by another company whose name don't recall. I don't even recall how many different companies have held my accounts over the years. I do know that CFSB was one of those companies.

The thing that angered me was that the records weren't carried over between companies during murders and acquisition. The funds and securities made the switch, but the transaction histories and trade confirmations did not. When in later years I sold a stock, it became my responsibility to try to find out my cost basis.

It looks like I'll be going through that exercise again as my accounts are switched, willy-nilly, into another brokerage. The next one will probably use tax money to acquire eTrade -- and this adds insult to injury.

I wish there were a way to assess the potential stability of a brokerage house. Of course, if there were, we probably would all use discount brokers.

As Yogi Berra once said, however, predictions are difficult, especially about the future.

Mar 13 09:19 AM

[Dissenting ...:]

I posted this on a previous recent ETFC comment and fixed some of my numbers. Note that I too am long this stock but as a long-shot sentimental bet.

But, if you suppose that if ETFC is AMTD with a bank (it's not exactly but it's good to suppose things sometimes), then if we look at the numbers we can derive some interesting information.

For example, ETFC has about 2.6 mm trading accounts doing about 180k trades/day or about 1.4 trades/account/month. AMTD has about 5 mm trading accounts doing 300k trades/day or about 1.2 trades/account/month. In other words, the accounts have pretty much the same activity rate, but ETFC has less accounts, thus less volume, call it 40% less.

All things being equal (a little stretch but go with me on this), I look to the gross revenue now. I would expect then to take AMTD gross revenue at 60% to get ETFC brokerage revenue. AMTD is running at $200 mm/month, so that implies ETFC brokerage at $120 mm/month. ETFC is reporting total revenue of $250 mm/month (and a gross margin of 60% compared to AMTD of 90%).

That implies the bank is contributing $130 mm/month to get to their $250 mm/month in revenue. So with the brokerage at 90% margin, in order to get to an overall 60% margin with these numbers implies that the bank revenue costs a staggering about $100 mm/month at a 30% gross margin.

These are gross numbers before operating expenses. Now for operating expenses. AMTD expenses are $100 mm/month so we'd expect ETFC brokerage to be at $60 mm/month. ETFC is running at $225 mm/month expenses, which again, would put the bank operating expenses at a staggering $165 mm/month!

AMTD has a 40% pre-tax net margin with a bottom line of $80 mm/month. ETFC brokerage would be the same at $48 mm/month then. Thus, the bank is losing $125 mm/month! the brokerage revenue would have to at least double in size to make up the difference and break even, or the bank losses would have to subside. To double, they would have to spend at least the $1500/account that AMTD accounts are worth, north of $4 billion. Probably much more. Seems out of the realm of possibility.

One hope would be for the regulator to allow the brokerage to breakout and keep the sweep deposits at the bank, then sell the bank FDIC style to someone. One could always hope.

Mar 13 09:26 AM

[User 328329:]

Look at there monthly changes in net accounts, not just the accounts added. They are dropping off a cliff. It's the core brokerage that will drive the growth of assets, as they need assets brought in to be able to lend them out. May or may not happen, but the fundamental business is not set up for lending out with longer term loans

Mar 13 10:58 AM

[jackooo:]

As an account holder and handling 5 more accounts with Etrade for other individuals I wish to say the company is nothing but hassles.
With that said the other self help brokerages are almost identical. No one listens to the problems I encounter.
25 cents sounds right.

Mar 13 12:49 PM

[BM1087:]

E*Trade made a great bet with banking but got seduced with offering risky services such as credit cards and mortgages. I personally have a brokerage, employee stock plan, and checking/savings account with E*Trade. So for me I enjoy the convenience of the one stop shop and would be very willing to buy the stock at this price. Consider it a cheap option.

Mar 13 12:57 PM

[gwinner:]

Dissenting Opinion needs to include E*Trade's huge advertising burn into his/her interesting models. That was strategic, to keep new accounts and assets coming in. However, E*Trade recently decided to significantly reduce the ad burn. I think getting back into the mortgage business is a huge statement, if you trust the current management team.

I just called the E*Trade Mortgage number. As of today, they have started offering mortgages again. I think that is good news and another huge statement, if you trust the current management team.

Disclosure: Long on E*Trade, long-time satisfied customer and someone who trusts the current management team.

Mar 13 01:32 PM

[Whitehawk:]

From the analysis given by Dissenting Opinion I judge ETFC to be a lottery ticket. I also have one of my brokerage accounts there as a legacy from CSFB, and I do have to say that the customer service *sucks*. ETFC in the last year also prevented me from trading one of my nasdaq stocks online, saying it was "under review" but never giving a reason for why it was under review for 3+ months. I had to call in orders. They also have no clue about tax documentation from Canadian oil trusts. But it sure annoys me that the likes of a shithead C analyst can downgrade the stock given the joke of a business that C runs itself, and has gotten the "liberty" of a gov't bail out, most likely to help foreign interests. Where would they be without the gov't? 0.25 cents.

Mar 13 01:47 PM

[Lightway:]

I have had similar issues with support with Etrade and also TDAmeritrade. It seems my support requests disappear into a black hole. My experience with Folio has been really good customer service however.

It's also a big differentiator when Etrade's transaction fees are running at $13 verses $5 from some of the other online platforms.

I think all online platforms need to improve on their tax reporting integration with products like Turbo tax. The import feature has been pretty much worthless as it only establishes the final selling price but doesn't calculate the original cost basis so you're better off just using a spreadsheet and doing it manually.

If there's an online platform that simplifies tax management, that's where my money will be heading. This is my first year with Folio so I can't rate their tax planning.

Regarding the actual stock, I'd have to agree with Whitehawk's sentiments. Lottery pick, but then, who is Citi to make recommendations?


On Mar 13 12:49 PM jackooo wrote:

> As an account holder and handling 5 more accounts with Etrade for
> other individuals I wish to say the company is nothing but hassles.
>
> With that said the other self help brokerages are almost identical.
> No one listens to the problems I encounter.
> 25 cents sounds right.

Mar 13 02:19 PM

[Ashley Roac...:]

ETRD has been run by an arrogant, over-reaching management team(s)since day one. Their balance sheet is toast and common holders need to face the fact that the failure of the balance sheet will swamp the boat. Better to figure out who will end up buying the ETRD brokerage operation and folding it into their own. They will be the party that stands to capitalize on the strong business you describe. The common is trading at .60 for a reason. I don't see how the opportunity for a big gain makes the risk of losing 100% attractive. Better check what you've been smoking.

Mar 13 02:42 PM

[Shaggieman:]

Lost cost basis. One may wonder how this can possibly happen? Very easily because the acquiring brokerage house doesn't maintain the old brokerage house records. The new online brokerage downloads into Quicken only the new trades and they have an X date when shares were transfered in to the new account but no cost basis. In order to go forward it's necessary to merge your old account with the new online brokerage account in Quicken. I am sure there's a way to do that if I was an expert Quicken user or willing to pay the fees required for the help desk.

I too have been switched from Morgan Stanley Online to CFSB to E-trade and now too ????. I think the change will happen soon since I just straightened out my accounting from the previous take over. That's the death signal for me as again all of my cost basis's will be murdered.

Mar 13 03:10 PM

[Shaggieman:]

I forgot to add my solution to this accounting nightmare was to re-enter the Quicken trade data from the individual trade confirmations. A very painful and slow way to go.

Mar 13 03:17 PM

[Socialism c...:]

ETrade is losing its most valueable asset -- customer good will. They have decided to be uncompetitive and not support their customers:

1) With their fees ($6.99 to $12.99, depending on asset base and number of trades per quarter), relative to other online brokerages such as Scottrade ($7 -- ALWAYS).

2) Income tax support: During completion of my taxes the past 3 years, I have had trouble EACH YEAR with the automatic transfer between ETrade and TurboTax -- ETrade does NOT transfer all data needed, specifically missing cost-basis data, which has to be entered manually. Of course, one finds out...one can BUY the GainsKeeper product to do this part. Guess what? ScotTrade INCLUDES GainsKeeper!!

Each year, I have emailed BOTH TurboTax and ETrade to complain about the incomplete data transfer, citing that BOTH products/services are ALREADY BEING PAID FOR. The "good people" at ETrade have each time responded with a "c'est la vie" attitude..."you can purchase GainsKeeper".

ETrade is LOSING customer goodwill, and seemingly don't care. I am still a customer, but considering ScotTrade. I am NOT surprised that ETFC is down that much, nor will I be surprised if the cease to be a going concern: I learned from my Economics teacher in high school that "The Customer Is King!" You don't thumb your nose at the king and get away with it.

Mar 13 04:00 PM

[Socialism c...:]

You're not alone. I've been complaining to ETrade about this for 3 years!! Their solution: buy our GainsKeeper partner product. Um...no thanks! It's MY data, and I'm ALREADY paying you, you idiots!!!


On Mar 13 03:17 PM Shaggieman wrote:

> I forgot to add my solution to this accounting nightmare was to re-enter
> the Quicken trade data from the individual trade confirmations. A
> very painful and slow way to go.

Mar 13 04:03 PM

[VP of Commo...:]

I got off that roller coaster at $4, and am not getting back on any time soon.

Mar 13 04:18 PM

[whisperonth...:]

I have accounts at Vanguard, TDAmeritrade, and Sharebuilder, and have to say that of the three, Sharebuilder is the best. They have a Gains and Losses calculator that works well enough for my purposes (I'm only a small investor) and although I'd like to be able to import tax data into TurboTax, I won't be using any of them for import purposes next year because I had too many errors to fix later. It would have taken just as long to enter it all myself correctly the first time. I saved no time by importing it. I have considered going to E-Trade, but since Sharebuilder has everything I need at a price I like, I'm sticking it out. I may consider picking up a bit of ETFC though. It can be my risk of the month, at a price that won't hurt too much if I lose.

Mar 13 06:35 PM

[JWG:]

Steven F: Here's a question that has put me off buying ETFC. Citadel owns a bunch of stock and a whole bunch of senior debt. They effectively control ETFC. So now: is it more advantageous to them that the company recovers, or goes bankrupt? If it goes bankrupt, they lose on their existing stock (goes to zero) but their debt would be swapped for new stock, and they'd end up owning a *higher* percentage of the company. They might make out a lot better that way. Any thoughts?
/jwg

Mar 13 07:00 PM

[Urbane Gori...:]

I'm not going to prognosticate on Etrade's ability to survive, but if my experience with them is anything to go on. Not only will the collapse, but they should be encouraged to die. They should not be allowed to handle people's money.

Mar 13 08:36 PM

[bjames:]

Longtime reader, first time poster.

I often read this site because financial analysis, especially reading balance-sheets, is not my forte. I like the discussion and debate that occurs here as it tends to be well informed and sufficiently balanced between experts and laypeople.

Side note: If you are interested in why a balance is important, read "The Wisdom of Crowds" which posits that a population of experts will actually make less accurate predictions than a population that is balanced. Interesting read and explains a lot of things about how we got in the current financial / mortgage / banking crisis.

I am an Etrade stockholder (started buying at $4 bought it down to $.75) and a user. I did the same in 2001-2002 when Etrade was again in trouble and it made me a lot of money.

I think I have something to add to the discussion. First some credentials: I am an expert at ecommerce technology, online usability and branding and have built trading sites in the past.

Etrade has the best brokerage platform, from a technology / usability standpoint, than any of their peers. The brand is strong, well recognized and growing even with the terrible press and current economic crisis.

Compared to the segment, their support is best of class in online brokerage firms. If you throw traditional banks and brokerages into the mix, their support is without peer. Now, that's a little like saying Etrade is the prettiest pig at the fair because all companies, with a few exceptions, under-invest in support.

So, what does that have to do with stock price and business stability? A lot, because when a company's future is indeterminate, when the metrics we use to measure health can't trusted and experts have become heretics...all you have is the product.

Etrade's product is superior and I will bet on that.

I will keep reading.

Mar 13 09:59 PM

[devassocx:]

I have used Etrade since it was only available as
a text only service via compuserve.

Generally, I have found it to be quite satisfactory but
can not comment as to how it compares to other services.

Over all that time I encountered only one problem and that was with bringing in and merging my wife's individual account at another brokerage to our Etrade
trust account. The problem took about 3 months to
solve and lots of phone calls but finally everything dropped into place.

I hope they survive as I am also a stock holder.

Mar 14 12:04 AM

[PeteK:]

Got burnt 3 times.
Rather get BBX or BZH instead.
Much better chance than etfc.

Mar 14 04:22 AM

[Terry Finn:]

Who are you kidding? I've watched this one tumble from $25 to 75 cents in less than 24 months. Vegas would be a better bet and you could at least see the dancing girls. So many bloggers are so desperate they will write anything to try to turn this loser around, so that they can recoup part of their ETFC loses. The folks buying this are the same people who believe that Obama will win a second term in the Whitehouse. Keep DREAMING!

Mar 14 09:15 AM

[curious cat:]

etrade has given me better service at better prices than my previous platforms. i also have an account at schwab, which does not give me as much info and costs more. i'm happy to hear that they are doing mortgages again, as i am a no risk customer just looking to refinance.

Mar 14 11:10 AM

[Stephen Fra...:]

very amusing false assumptions.

ETFC closed right below my cost, and any blogger that believes that he can move the price by writing about a stock is stupid. I don't, and I don't think many do.

And I didn't want BO to have a first term in the white house... so hopefully he does NOT win a second.


On Mar 14 09:15 AM Terry Finn wrote:

> Who are you kidding? I've watched this one tumble from $25 to 75
> cents in less than 24 months. Vegas would be a better bet and you
> could at least see the dancing girls. So many bloggers are so desperate
> they will write anything to try to turn this loser around, so that
> they can recoup part of their ETFC loses. The folks buying this are
> the same people who believe that Obama will win a second term in
> the Whitehouse. Keep DREAMING!

Mar 14 11:39 AM

[Hedged In:]

*The Positive*
I'm an E*Trade account holder, and for me it's been great, particularly
1. The ability to move money between a brokerage account and bank savings account with a click (OK, two clicks actually) to maximize interest or pay bills,
2. The online bill pay, which is fantastic,
3. The fact that E*Trade rebates all my ATM fees.
I can't talk about trade execution quality, because I generally use limit orders.

*The Negative*
Valuing E*Trade's brokerage as a stand-alone business is a mistake, because E*Trade could lose so much money on it's mortgage portfolio that it will go bankrupt and be forced to sell the entire brokerage. I bought ETFC for my kids (they still own it), and as a result didn't exactly ensure their future...

*The Hope*
Now that the FDIC insures bank deposits up to $200k (or is it $250k?), anyone can try an E*Trade bank account with no risk of loss of capital. Those ATM refunds and best in class online bill pay really are great...

*The Sad Footnote*
If E*Trade is forced to sell its brokerage to raise cash, and its brokerage gets split from its bank, that will be really sad. Having a single, integrated platform for banking and brokerage is fantastic from a customer perspective.

Mar 14 01:41 PM

[Stephen Fra...:]

I see your point... but at this time, I'm in for the buy and hold... till bankruptcy or better days.


On Mar 13 04:18 PM VP of Common Sense wrote:

> I got off that roller coaster at $4, and am not getting back on any
> time soon.

Mar 14 05:19 PM

[Texas_bugsi...:]

To: Dissenting Opinion

You need to read the 10K from Etrade as your comments on banking losses don't fit what is reported. See page 42. The losses by Etrade are mostly "provisions" for losses on loans that have not actually been declared losses yet. This provision at the end of 2008 was about $1.6B, of which about $1B was set aside in 2008.
Losses actually taken in 2008 in the banking segment appears to be only about $195M. The 10K also states that the loan loss provision is 114% greater than the loans currently considered delinquent.

Bad loans need to be delinquent for more than 90 days so the next quarter report will give us all a much better picture as it will reflect what has happened since the stock market crash and all the layoffs.

Reading Etrade's 10K I cannot understand how any analyst can conclude anything about Etrade's loan portfolio. They either have to have inside information not available to the average shareholder or they get info from some other source than Etrade.
(I have a very LOW opinion of Citicorp analysts as I have repeatedly seen them put sell ratings on things when the stock is already at a low, and many have gone up significantly after that...Many of their calls don't make sense to me so I just take it that Citi analysts to have a "stock manipulation" goal; or to trash the stock so their inside people can profit by having shorted it or by buying when it goes down...I wish the SEC would actually work for shareholders; but they are just at much trash as the Citi analysts)
I do agree things at Etrade could get worse but it appears to me that Etrade management is ahead of the curve compared to most financial institutions; as I mentioned earlier, their loan loss provision at the end of 2008 is 114% greater than their delinquent loan amount and they are well in compliance with their bank capital compliance ratio....

Mar 14 11:59 PM

[THofler:]

jimocarrol,

My experiences are similar to yours. I was very annoyed that cost basis data isn't transfered between brokers. Then I was told that none of the brokers do this. (I suspect it's true.)

I find it a little weird that Cox's SEC spent its time advancing the XBRL language, but never bothered to enforce the integrity of client's cost basis data.

On the bright side, my accountant tells me that a new law will fix this soon.

BJAMES,

I found your comments verrry interesting. I believe web sites like SA tend to reinforce a piling-on reinforcement of the gripe of the day.

My support issues with ETrade have been far from perfect, but all considered not half bad. I usually get to someone knowledgeable quickly. I've used 3 different trading web sites & like ETrade the best by far.

Mar 15 01:38 AM

[jljamup:]

Amen brother, I was beginning to think that i was the only sane person left that read this report.


On Mar 14 09:15 AM Terry Finn wrote:

> Who are you kidding? I've watched this one tumble from $25 to 75
> cents in less than 24 months. Vegas would be a better bet and you
> could at least see the dancing girls. So many bloggers are so desperate
> they will write anything to try to turn this loser around, so that
> they can recoup part of their ETFC loses. The folks buying this are
> the same people who believe that Obama will win a second term in
> the Whitehouse. Keep DREAMING!

Mar 15 04:34 AM

[mr.finviz:]

It's one of those big pain or big gain plays. I am a customer of E*Trade and I actually love their online banking platform. I don't use their trading platform apart from my ESPP but the online bill pay and quick txer are the best there is out there. I am hooked to it so I hope they survive.

Mar 15 04:34 AM

[Sailorman:]

I am a customer and love their trading plafform and the real time trading program. Also enjoy the the banking services!

How dare Citi say anything about anybody else! It's like the pot calling the kettle black. They have absolutely no romm to comment on anybody and anything.

Mar 15 11:42 AM

[in4thelonghaul:]

ETFC has a nice trading platform and the banking integration is a real plus which should be attractive to potential acquirers. That said, in this increasingly tough financial environment, greater numbers of frequent traders will continue to balk at the excessive fees which brokers such as ETFC charges. Only idiots or infrequent traders will continue to use ETFC, when fees are so much cheaper at other discount brokers like IB,MBT,TradeKing and OptionsHouse.

Interesting that ETFC rose over 13% on Friday in spite of the idiot C analyst .25 target. The best hope for ETFC shareholders is an offer from another broker/banker, maybe GS.

Mar 15 05:45 PM

[JohnnyM:]

Why would anyone listen to an analyst who is recommending the big sell tactic after the company stock gets pummeled to 50+ cents? The better and bolder analyst would have done so at $20 but in reality that just doesn't happen. When the pros say to sell when near the bottom...I say BUY BUY BUY!

Look at the chart, look at the market....you know which way ETFC is going and it ain't South! Watch Citigroup take off too. A ton of fun is headed our way.

John M


On Mar 15 05:45 PM in4thelonghaul wrote:

> ETFC has a nice trading platform and the banking integration is a
> real plus which should be attractive to potential acquirers. That
> said, in this increasingly tough financial environment, greater numbers
> of frequent traders will continue to balk at the excessive fees which
> brokers such as ETFC charges. Only idiots or infrequent traders
> will continue to use ETFC, when fees are so much cheaper at other
> discount brokers like IB,MBT,TradeKing and OptionsHouse.
>
> Interesting that ETFC rose over 13% on Friday in spite of the idiot
> C analyst .25 target. The best hope for ETFC shareholders is an
> offer from another broker/banker, maybe GS.

Mar 15 07:56 PM

[Bill Zielinski:]

Nice analysis.
Probably worth picking up a few shares under the "lottery ticket" theory.

Mar 16 05:42 AM

[Rohan C. Pease:]

On Friday I got long ETFC with the house money I made on BAC last week. Its truly a spec play, but I see a four bagger here my friends!!!

Mar 16 12:15 PM

[Rohan C. Pease:]

Selling EFTC into strength today, up 52% since putting the position on friday afternoon. Thank you to Steven for providing some helpful insights into ETFC.

Mar 18 10:15 AM

[wholesalecd:]

I broker with Scottrade and their trade fees are not $7 always. They charge more for certain stocks and they also charge a percentage of how much you buy.


On Mar 13 04:00 PM Socialism cannot compete! wrote:

> ETrade is losing its most valueable asset -- customer good will.
> They have decided to be uncompetitive and not support their customers:
>
>
> 1) With their fees ($6.99 to $12.99, depending on asset base and
> number of trades per quarter), relative to other online brokerages
> such as Scottrade ($7 -- ALWAYS).
>
> 2) Income tax support: During completion of my taxes the past 3 years,
> I have had trouble EACH YEAR with the automatic transfer between
> ETrade and TurboTax -- ETrade does NOT transfer all data needed,
> specifically missing cost-basis data, which has to be entered manually.
> Of course, one finds out...one can BUY the GainsKeeper product to
> do this part. Guess what? ScotTrade INCLUDES GainsKeeper!!
>
> Each year, I have emailed BOTH TurboTax and ETrade to complain about
> the incomplete data transfer, citing that BOTH products/services
> are ALREADY BEING PAID FOR. The "good people" at ETrade have each
> time responded with a "c'est la vie" attitude..."you can purchase
> GainsKeeper".
>
> ETrade is LOSING customer goodwill, and seemingly don't care. I am
> still a customer, but considering ScotTrade. I am NOT surprised that
> ETFC is down that much, nor will I be surprised if the cease to be
> a going concern: I learned from my Economics teacher in high school
> that "The Customer Is King!" You don't thumb your nose at the king
> and get away with it.

Mar 18 10:42 PM