Seeking E*Trade's 'Magic Moment' 54 comments
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First a couple of definitions:
The 'magic moment': When a turnaround stock starts to turn vertical, pros call it 'getting re-rated'.
The catalyst(s): Simple, fundamental improvements in businesses (but before the 'magic moment' dawns on the stock price, invisible)
So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If A), B), and C) -- it's the most powerful combination in the marketplace.
With that in mind, when will the MAGIC moment occur for E*Trade (ETFC)?
E*Trade is well on its way to accumulating its year end target of $1 billion excess cash for a safety cushion (a key difference between Layton and the old CEO: in business, you just can't spend your last dollar on your greatest idea(s)). The environment is improving, that's good, but a safety net is called a safety net for a reason . . . so even though buying back stocks and bonds would be great right now the safety net is more critical.
Recent reports on the liquidation of non-core assets and the execution of 10% cost savings would indicate this $1 billion target will be reached well ahead of schedule, almost certainly by October (Q3) and very likely by the end of July (Q2).
Target cash achievements to date:
i) They already accumulated $695m as of Q1
ii) The pool went up by $260m in one quarter
iii) Now E*Trade is accelerating its non-core assets sale program including
selling, last week, its stake in the India venture to HSBC for $145m.
After the $1 billion target is reached, any extra excess cash can be spent on debt/stock buybacks. Both will be accretive to shareholders, which should be the focus, depending on where the prices are by then. At current prices, both E*Trade Stock and Bonds are steals: bonds yielding some 11% and stocks at barely 2x normalized operating earnings. That’s right, barely 2x E*Trade's Online Brokerage arm's income.
In May, The New York Times published an article entitled “A Wish List for Fixing Wall Street,” which highlights Kenneth Griffin’s (Citadel Investment Group founder) insights for Wall Street. It is easy to see that with Citadel and Mr. Griffin providing the financial foundation and direction for E*Trade’s progress, the timing for E*Trade’s MAGIC Moment will most likely be sooner instead of later.
Note: Edited from materials written by Numbersssss
Disclosure: Author has a long position in ETFC
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This article has 54 comments:
If both A), B), and C) -- it's the most powerful combination in the marketplace.
Correct grammar:
If ALL A), B), and C) are correct, it's the most powerful combination in the marketplace.
*******
Other than the above grammatical error, the contents of this article are great. ETFC is a treasure in junk yard, given up by men three feet from gold.
*******
Cindy, please correct the grammatical error.
Have you no shame,did you suddenly discover that SA has no limits on submissions so you're just going to make this into a pumpfest?
Most other contributers use some discretion in talking their books but you don't even bother to write your own "analysis",you just troll the ETFC message board begging for contributions to the "cause".
Sad,really.
Even worse. Not only that s/he is the one who writes 24/7 negatively on E*Trade in such venues like Yahoo stock message board, but strangely always positively at the same time on E*Trade's competitors, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
Here's some links to the original thought that Cindy is trying to pass off as somehow her own and another to the debate it's spawned:
messages.finance.yahoo...
messages.finance.yahoo...
You've tried six articles since April 18 to prod the stock and the price remains where you began,seemingly moribund at $4.
Look at your wasted efforts:
Cindy Reed's Latest Articles
Seeking E*Trade's 'Magic Moment'
on May 23, 2008 about ETFC
E*Trade: What the Analysts and News Haven't Told You
on May 22, 2008 about ETFC
Schwab, E*Trade: Monthly Activity Comparison and the Industry Average
on May 15, 2008 about ETFC, SCHW
E*Trade's Annual Shareholder Meeting Should Pressure the Shorts
on May 09, 2008 about ETFC
Comparative Price Shopping: Selected Banking, Mortgage and Brokerage Stocks
on Apr 21, 2008 about BSC, CFC, ETFC
E*Trade: Primed To Turn Around?
on Apr 18, 2008 about AMTD, ETFC, SCHW
Good article, and jbmaria you added little but vitriol in your posts. Might want to stick to something you have some knowledge of, but you are not adding a lot of information. On second thought, stick with Yahoo Finance, that seems to suit you.
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend downward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
Not only that s/he is writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
Dave
again, sell on an investment is just moving money around to better position an investor, there should be little concern over that and we all know why etfc wants more cash and less debt.
50mil per q for interest is nothing compares to schw's per emp cost which puts etfc in somewhat of an adventage over schw and the market certainly rates etfc much lower due to the recent cry wolf.
i was going to talk about everything you wrote, but i'll just generalize as "if there's no risk at all, this won't be an investment and you have the right to be concern but don't scare yourself nor cry the sky is falling as we discuss tomorrow's possibilities"
one thing i like is that layton's pay is tie to the stock value and he is not meeting too much resistance in his executions.
Are you an agent/paid basher for Chuck? if for Chuck, tell us again you are positive on the substantial losses of their fund but at least disclose to their fund investors the fact that you promote for Chuck and attempt to depress anything Chuck may want to buy:
messages.finance.yahoo...
Or,
Are you an agent/paid basher for Joe? if for Joe, any comment/insight as to why AMTD customers keep complaining about the frequent outages of their trading platform? for latest, see this
messages.finance.yahoo...
oh, if for Chuck, answer the same question why they are snails but no need on AMTD outages:
messages.finance.yahoo...
Jimmy Goodwin
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
www.marketwatch.com/ne...
What is JBMARIA's agenda???
Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
Jimmy Goodwin
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,I'll explain.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
What is JBMARIA's agenda???
Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
Jimmy Goodwin
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,let me explain.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
What is JBMARIA's agenda???
Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
Jimmy Goodwin
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,I'll explain.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
Jimmy Goodwin
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,I'll explain.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
FYI,here's a thread from '04 in which I'm wildly bullish on ETFC and if you read further down I'm slamming the SCHW and AMTD models of those days and extolling ET over them.So claims I "work" for the other guys and am biased v. ETFC don't ring true but I have been following this sector for many years.
messages.finance.yahoo...
BTW- "obvious lies"-point them out ?
www.thestreet.com/vide...
www.thestreet.com/vide...
<rant>
Investing is not supposed to be an emotional excersize. Cindy presented (alleged? I don't know yet, having just finished reading the mostly useless litany of emotional personal conflicts) facts for consideration. If JBMARIA had omitted the presonal sniping, the prsented considerations seem worthwhile WHETHER RIGHT OR WRONG. Due diligence is enhanced when one is presented with items that may not have been considered. Then proper investigation of those considerations is mandated.
I was long ETFC and as soon as they announced the debt-for-equity swap and the new issuance, I sold. Made a little bit.
I like the company, I look forward to getting back in at the right time (if ever - no crystal ball here - just patience observationa and analysis). But I do NOT let my personal bias (substantially) affect my trading/investing decisions.
The multiple posts of the (substantially) same text wastes the time of all who are here for thoughtful information gatering/exchange, as does the personal jibes attached to the posts.
Take it back to the garbage dump (YAHOO) PLEASE! Let the serious folks with limited time and resources get on with investing here!
</rant>
OK. Now I offer something that bothers me, but I'm not sure how important it is. There is a technical issue that is (apparently) costing ETrade $. I reported this over two months ago and it is still not fixed. My concern is that the financial difficulty ETrade is fighting has cost them needed resources to keep their platform properly maintained and enhanced. I also worry that their level of expertise or astuteness of customer support may be under pressure. This concern grows from the lack of resolution of the first problem and occassional conflicts in information provided by CS reps. I also see a lack of proper CRM and problem tracking systems (or, alternativel, lack of proper use of those tools), as evidenced by the nature of my interactions with CS reps and the number of times I've interacted with them about the problem.
With the recent closing(s) of various branch offices reducing costs in non-core businesses and cash available from the recent financial/equity transactions, I will watch to see if those resources are, or can be after debt service, used to enhance their core competency.
If that is done and they continue effective management of the other business aspects (cost restructuring, primarily, and recovering customer deposits and accounts assets lost in the recent past), they should be on a steady road to recovery.
If I see evidence of improvements in these areas, I will be back into the stock. If not, well the market will do what it does.
DISCLOSURE: I'm relatively new at this trading/investing stuff, have no affiliations with any organization related to anything addressed here other than being an ETrade customer. My professional background does enhance my analytical ability and emotional detachment. I've *lots* to learn yet.
I *can* be hard to love for those who wantonly waste the time and resources of others.
Kip
ETrade customer and very minor stock postion owner.
messages.finance.yahoo...
May 24 08:54 AM
lol JB-Maria, you've obviously changed your position on the stock. If you weren't "on a mission", why would you post 11 comments on this article alone.'
I ask once again Jimmy,what "obvious lies" are you accusing me of or are you just shooting blanks?
You asked Jimmy what "obvious lies" you made. Either you assumed readers of this article and its discussion board had 0 IQ or you believed that when "obvious lies" repeated 13 and counting-times, they would somehow magically become truths.
To begin with, when you label what the author cited numbers that are based on official SEC filings merely "wishful thinking and alleged progress", that are "lies":
i) The author cited that ET "already accumulated $695m as of Q1" in excess cash, is that a fact or "alleged progress"?
ii) The author also cited that this pool of excess cash "went up by $260m" in q1, is that a fact or "alleged progress"?
iii) The author further cited that, post close of q1 books, in selling its take in the India venture to HSBC, ET generated another $145m in cash, is that a fact or "alleged progress"?
You are full of lies.
Also, while you are so forceful in putting out lies and more lies, why are you shy of these questions:
"What is JBMARIA's agenda?
Not only that JBMARIA writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!
So JBMARIA,
Do you mislead message/blog boards when you say you "hold" ETFC?
Do you actually short ETFC?
Do you hold SCHW or any of E*Trade competitors' stocks?
Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?"
???
Jimmy Goodwin
May 23 02:36 PM
Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
*******
Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets.
Numbersssss is "wishing" for this to occur:
"So WHEN is the magic moment? Generally, it's when:
A) the company reports a profit after losses, or
B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or
C) the company's analysts support business actions and trends with positive commentary.
If both A), B), and C) -- it's the most powerful combination in the marketplace."
*******
Well hell,if ETFC hits this trifecta,I get bullish too.
But where's the evidence any of this will occur?
Profits and massively improved cash flows in Q2???
As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend downward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:
seekingalpha.com/artic...
Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.
Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.
Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.
Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
Curious!
At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!
I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.
Frankly,mgt. is another reason I'm wary of ETFC.
Look at the facts.
Layton,according to published reports,was not the BOD first or even second choice for the job.
Layton,to my knowledge, is not known as a turnaround specialist,per se,and he did have some Enron rumors surrounding his former job,perhaps even contributing to his retirement.
To date,the pps has not improved.
Layton is very much at the mercy of KG,who I trust as far as I can throw.
Layton's heavily touted pay package would do best if he succeeds at a turnaround BUT he is getting a $1 million/year cash and will get a nice payout in the event of a buyout and I don't think there's any caveat as to buyout price.This is from memory so you might want to check the filings on that,not that momentous an issue though.
Bottom line,he hasn't been there long enough or achieved enough to rate him so he remains a question mark,IMHO.
I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
Are you aware this article is based on research by a guy who claims to be a genius yet made this prediction about ETFC last year before they announced massive losses?????
Re: Why ETFC is a $33 stock, and How?? 16-Oct-07 02:45 pm
kc,
My best guess is that ET will NOT do what I just suggested because in all fair assessment they do NOT need to provision anything beyound what they already over-provisioned in August. I also guessed and now with more confidence after the Moody's report and SCHW report of its operations will re-iterate that ET will report a good set of core #s.
Stock should also react well post tomorrow after hour call, then steady as she goes going forward.
BUT if they do hear my call and do just that --- the way, massively over-provision thing, I agree there would likely be another shake in tomorrow AH and Thursday premarket, but if past such experience was any guide, no more than a few minutes after 9:30am on Thur.
Going forward, ETFC would then magically be held up as the new post child again, attracting new set of investors/traders. So, IMHO, this would cause a short lived zig but the zag to $33 and beyound would be faster and more spirited.
Either way, it's a buy before the report.
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Worst case scenario is someone steps in and buys them. Best case, they pop this summer. At 4 bucks, both are a win.
It's really a question of can you make more, and faster, somewhere else.
Unrealized losses mean nothing. I can hold on to them for another year if I have to. I dont think that I will have to.
Who can think of major companies that went banko this year--chapter 7? Hawaiian Airlines is the only one I can think of. There were some chapter 11s. Sharper Image, Bed Bath and Beyond, (Ironically--I saw sharper image products there the other day), and a couple airlines. But, their stock is possibly comperable in value to Etrade right now. (someone should look that up!). So, Im making a good bet. If etrade goes bankrupt, then the whole market is screwed and I can say goodbye to most of my portfolio. $4 a share is getting close to penny stock for a company that was trading at $25 share this last summer. Now, this is not the same company. But, with 15,000 shares, I will be very happy with $14 share at the end of the year.
It's a fowl story you attempt to construct about my motivation. Fact is ETFC was one of my biggest winners,I bailed at $25 and have watched a fine co. disintegrate since.
I like being right about my calls and don't like pumpers who talk their book to the detriment of new investors. But don't believe me,I've 8 years of posts on yahoo that verify my story-what have you got??
As to cindy,she based this entire article on another yahoo poster who has been incomprehensiby WRONG on ETFC for almost a year. Just look at this call by numbersssss back in September when ETFC was in the teens:
messages.finance.yahoo...
Being right for a long time on an equity that you have studied intensely used to count for something.Know this,when I think I'm right I don't back down.
Bashing the stock + saying you've never shorted it = no credibility.
I think it's a great buy so I bought it. If you think differently, cool. Short the stock so I can squeeze you out and make some money.
Of course, if your equation is ...
Bashing the stock + obvious lunatic = reverse psychology pumping the stock ...
well, that works for me too.
So just to summarize ... thanks!!
Get a life! If you think that a few people on this blog will actually influence the price of the stock.. well...Ill bet all of us combined own about 100,000 shares. .001% of the company.
Last August,down at $15,I was ready to buy back when Bhatia's first warnings hit and from that point on I've been gradually comprehending the gravity and peril of ETFC's mortgage issues.All the while I've been discussing the situation on Yahoo,please check for yourself.
So,yes I don't currently own a position but my interest in the stock and the OLB sector is highly documented and approx. eight years old.Unlike many of you pumpers and whiners,I didn't just show up to talk my book. I've been here all along and haven't stopped having opinions nor will I give up my voice on the sector.
And being of a stubborn nature,the more crap you clowns give me about my views,the more likely I'm going to pound them home.
As I understand it, and I could be wrong, etrade does not but paper on the secondary market. They are just an originator. So, they have exposure on the 2nd loans that banks usually keep in their portfolio.
I dont think that we are going to find a run on the bank at etrade. And, like I said, im in it for the long haul. If etrade goes banko--that woul mean that the entire finacial system is screwed and we are all screwed for a long time.
what's your projection on etfc in the near term to 2 years?
You're wrong Mr. duck. ETFC continues to hold north of $35 BILLION in mortgage paper of various flavors some of which WAS bought on the secondary market and very well may have been poorly underwritten.
Read the filings,it's all there.
What no one knows is how much will go bad in the future,are you feeling lucky?
Never really understood that?
Quite honestly and respectfully, you are one insecure individual. I would strongly suggest honing your communication skills as you are clearly not able to make an argument that makes common sense.
Of course Etrade's situation is not rosy but the question at this point is whether or not that is baked into the stock which is trading at a seventh its 52 week high. The market has already aggressively priced in a dooms day scenario; at this point the stock price has been building a solid base at $4.
Some of your points make sense but you fail to apply your analysis to the stock price. The street's low expectations will play in ETFC's favor as a profitable Q3 would create a short covering frenzy.
SA was set up to provide a voice for those without a platform for their views to make themselves heard.It's a good idea and I've read a lot of great articles on this site.
SA was not set up for people to shill their investments although I suppose every good idea eventually gets corrupted and Cindy Reed is simply taking the abuse to its inevitable level.
Some facts:
Cindy went long ETFC and decided to explain her position on SA in mid April.No problem there,essentially what the SA site is all about.
Then Cindy got a "bright idea". There's no real limits on SA,Cindy could flood the news with positive articles on ETFC and theoretically profit for her trouble by stimulating the stock pps.
So,our heroine marched over to the yahoo message board to actually recruit help in perpetrating this distortion of the process.
There she found other shills perfectly willing to join the cabal and promote the stock.Cindy trolled the board under the name savyinvestor11,the entire story can be followed by reading her posts:
search.messages.yahoo....
Her main partners in this blatant and undeniable promotion on ETFC are numbersssss and prescient11, other sympathetic and contributing posters include dig4gem, rossetti2000, methusalaw, piyrwsc, krisscritter_1, quasimatter and epiquette ,to name a few.
What these slimy folks are doing goes against the spirit if not the letter of the rules of SA.I don't like it and I'm going to dog them with this warning.
I have no position in ETFC after selling my last shares in June'07.I was a vocal long for 4 years before that and am currently a very vocal cautionary voice on the stock.All my posts can be found on yahoo under JBMARIA.
Here's the list of Cindy's pumps in chronological order:
Citadel Infuses E*Trade with Strong, Experienced Management
on May 29, 2008 about ETFC
Who Will Trigger E*Trade's Magic Moment - and a 111.4M Short Squeeze?
on May 29, 2008 about ETFC
Seeking E*Trade's 'Magic Moment'
on May 23, 2008 about ETFC
E*Trade: What the Analysts and News Haven't Told You
on May 22, 2008 about ETFC
Schwab, E*Trade: Monthly Activity Comparison and the Industry Average
on May 15, 2008 about ETFC, SCHW
E*Trade's Annual Shareholder Meeting Should Pressure the Shorts
on May 09, 2008 about ETFC
Comparative Price Shopping: Selected Banking, Mortgage and Brokerage Stocks
on Apr 21, 2008 about BSC, CFC, ETFC
E*Trade: Primed To Turn Around?
on Apr 18, 2008 about AMTD, ETFC, SCHW