Jason Schwarz

E*Trade: A Solid, Deep Value Stock

Ricard,

Excellent analysis. Patient speculation can produce quite a reward. I'm perfectly content to hold throughout 2010 and let the stock rise come to me.

E*Trade Appears Ready to Climb

Trying to interpret hedge fund activity is a tricky game to say the least. I submit that Citadel could be doing a little of all three: redemptions, 25%, and 9.9%. These conversion sales could be killing three birds with one stone at any given time. The only thing we know for sure is that Citadel is selling and it continues to be a burden on the stock. Watch the rate of change of Citadel sales for the real indicator. The reason why I only mentioned the 9.9% in the article is because it is the only verifiable regulatory issue. The others, including Etrade sales being used as redemptions, are speculation. Citadel could pay off redemptions through other means. A reminder-this investment is highly speculative. Don't plan on ever having a 100% grasp of Citadel's intentions.

E*Trade Appears Ready to Climb

Citadel isn't unloading shares because they no longer believe in the Etrade story. They are doing this for regulatory purposes. Evidence of this theory is in the eerie trading range of Etrade stock. These sales have been carefully orchestrated by Citadel & friends. Who are the friends? I don't know. But it is obvious there are large institutions buying the shares that Citadel is selling. If this weren't the case, you would see huge swings going on.

E*Trade Appears Ready to Climb

Redbeard200000 posted important data points that weren't included in the article. It looks like Citadel might sell off another 10 batches of 25 million shares each throughout October. I'm using the entire month as an opportunity to average into my position. The fact that Citadel is able to reposition with relatively small volatility shows the demand for ETFC in the open market. One could definitely wait until all conversions are complete but I prefer to average in as we approach a positive catalyst for the stock. This is not a quick trade for me. I'm looking at the next 6-12 months to generate my return.