jbmaria

E*Trade: Why the Strange Earnings Report?

Hirendu,
seems to me you are clearly mischaracterizing Schwab's comments in response to a question???

""If the time of a willing seller came along we would be there as a player, but more on our terms," Charles Schwab, the company's founder and chairman, said when asked the brokerage's strategy if regulators were to force E*Trade to sell part or all of its business.

"We're not hostile, we want a willing seller," Schwab said of his firm's acquisition strategy in general, adding an acquisition was not necessary to increase market share."

Schwab Interested in E*Trade: Is E*Trade Interested in Schwab?

Hirendu,
seriously,
are you dating Cindy???

seekingalpha.com/autho...

Schwab Interested in E*Trade: Is E*Trade Interested in Schwab?

rl,a year ago you wrote:



rl27 CommentsFollow
with etfc first lien performing worst then expected, it is also expected that it would perform better over time as the storm blows over. even if the credit market continues to crumble, the majority of the stressed borrowers would have already folded. in the near term, we should expect less then "wow" results from etfc but it is very hard for me to see etfc not to at least double by next year. i'm trying pretty hard not to build a high expectation but at the same time, i'm expecting to at least triple my investment in the next 12 month period. am i expecting too much? is my thinking overly optimistic? if i triple my money in a year, is that not an "wow"? Apr 28 01:17 PM|Report abuse|Link|Reply00

Your credibility is a tad thin.
Just an observation from reviewing your historical comments on ETFC.

E*Trade: More Good News

ETFC currently owes Citadel $2.1 Billion at 12.5% interest,planned to grow to $2.5 Billion in the next 2 years:


'We have the option to make interest payments on our springing lien notes in the form of either cash or additional springing lien notes through May 2010. During the second quarter of 2008, we elected to make our first interest payment of approximately $121 million in cash. During the fourth quarter of 2008, we elected to make our second interest payment of $121 million in the form of additional springing lien notes. We expect to make our next three interest payments, which equates to all interest payments on the springing lien notes through May 2010 in the form of additional springing lien notes. The November 2010 payment is the first interest payment we are required to pay in cash."

So,as of now they are on the hook for:
"1) The $1.9 billion in principal does not include the $121.0 million of capitalized interest in November 2008, which resulted in $2.1 billion in principal of springing lien notes outstanding to Citadel as of December 31, 2008."

E*Trade's Brokerage Business Shouldn't Be Ignored

orca,

I miss Cindy too.

S&P Upgrades E*Trade Despite Struggling Financial Sector Peers

Ah,those fickle analysts:

S&P REDUCES RECOMMENDATION ON SHARES OF E TRADE FINANCIAL TO SELL FROM HOLDFont size: A | A | A
5:58 PM ET 7/22/08 | S&P Marketscope
RELATED QUOTES


4:00 PM ET 7/23/08
Symbol Last % Chg
ETFC
3.41 -15.80%
Quotes delayed at least 15 minutes

Q2 loss from continuing operations of $0.24 vs. EPS of $0.37 is wider than our $0.15 loss estimate. Loss provision for home equity portfolio was wider than we expected and credit quality declined, while losses on security sales offset better net interest margin and cost controls. Losses from investments in the GSEs will hurt Q3 results, but capital raised from other asset sales may offset. Net account growth also slowed. We widen our '08 loss estimate widens to $0.65 from $0.49, but keep target price at $3, a discount to a declining projected book value as writedowns continue.

Countering the AP's 'E*Trade Financial Earnings Preview'

Cindy ,you wrote this convoluted paragraph;

"Bank Earnings Exceed Mortgage Losses: In their June 30, 2008 press release, E*Trade announced that it has been able to “generate earnings in the Bank to absorb credit losses in excess of management’s current three-year forecast.” E*Trade investor relations has confirmed multiple times that the word “EXCESS” in this statement is related to the earnings and not to the losses. In other words, in is wrong to interpret this as saying losses are in excess of management’s forecast; the validated disclosure from this message from E*Trade Management is that earnings are exceeding losses."

Do we need a retraction in light of earnings or am I just misreading it?

Countering the AP's 'E*Trade Financial Earnings Preview'

Cindy,didn't you base an entire polemic on an S&P upgrade?

S&P REDUCES RECOMMENDATION ON SHARES OF E TRADE FINANCIAL TO SELL FROM HOLDFont size: A | A | A
5:58 PM ET 7/22/08 | S&P Marketscope
RELATED QUOTES


4:00 PM ET 7/23/08
Symbol Last % Chg
ETFC
3.41 -15.80%
Quotes delayed at least 15 minutes

Q2 loss from continuing operations of $0.24 vs. EPS of $0.37 is wider than our $0.15 loss estimate. Loss provision for home equity portfolio was wider than we expected and credit quality declined, while losses on security sales offset better net interest margin and cost controls. Losses from investments in the GSEs will hurt Q3 results, but capital raised from other asset sales may offset. Net account growth also slowed. We widen our '08 loss estimate widens to $0.65 from $0.49, but keep target price at $3, a discount to a declining projected book value as writedowns continue.

Metrics, Mortgages and Analysts

Well Cindy,all your "good friends" on the ETFC board seem to be missing you?

messages.finance.yahoo...

Metrics, Mortgages and Analysts

seekingalpha.com/artic...



......"A Final Word of Caution
Those of you looking to make easy money in the financials like E-Trade (ETFC) need to think again. The risk is too high right now. I find it amazing how so many who have taken a long position in ETFC cite the company's impressive book value as some sign of value or financial strength.Understand that book value is used in the event of liquidation of assets in bankruptcy and therefore usually has no impact for common stock holders. In addition, book values of financials are meaningless since the banks have overvalued their debt. Finally, book values typically have no way of fully accounting for the type of massive leverage the banks have built.If you were not aware of these basic facts, you really need to sit this one out, save your cash and wait for the next bull market, when nearly everyone does well.

Even Citibank (C) has considerable downside from here, as does Bank of America (BAC). Over the past year, I have made many recommendations to short the financials. Earlier in the year, my attention was focused on Lehman Brothers (LEH) and American International Group (AIG). The story on these guys is far from over but I would wait for a rally before going short again.

The next short to consider will be Merrill Lynch (MER). When MBIA (MBI) and Ambac (ABK) get another downgrade, Merrill will be in deep trouble due to their large exposure to insured mortgage debt. That said, you might be wondering why Merrill is already near a year low. It's quite simple. All that I have told you about Merrill's risks is widely known. But that does not mean it can't go lower. However, unless you are very experienced with shorting, you need to stay away from this strategy.

Will there ever be a time to pick up the financials? I doubt I will bother to pick up any of these (other than for short-term trading) even when I sense the bottom has been reached because the climb back up is going to be very slow and small. The dilution that has and will continue to occur will crush earnings for many years."

Metrics, Mortgages and Analysts

Looks like they ban on negative ETFC articles may be lifting?

seekingalpha.com/artic...

Metrics, Mortgages and Analysts

For the record let's post the "complete" S&P ratings revision as opposed to Cindy's condensed version:

"➤ ETFC is in the midst of restructuring its opera-
tions and balance sheet to focus on its retail
clients and reduce its exposure to consumer
lending and securities investments. While we
view the decision to refocus on its core compe-
tencies as prudent, we believe significant dam-
age to its balance sheet and future earnings
power has already taken place. While customer
and asset defections have likely stabilized, we
expect higher loan loss provisions, further im-
pairments, and dilution from its capital infusion
to constrain results for the foreseeable future.
➤ Despite the problems with its mortgage hold-
ings and security investments, ETFC continues
to post relatively strong retail results, with
strong net new customer growth and daily av-
erage revenue trades (DARTs) up 12%, year to
year, in the first quarter. However, we see a
number of negative headwinds in 2008, includ-
ing continued loss provisions on its first lien
and home equity portfolio, higher debt expense
and increased customer acquisition costs.
➤ We project a loss per share of $0.49 in 2008 be-
fore a return to profitability in 2009 with EPS of
$0.16.
➤ We believe ETFC's past decision to stray from
its core direct retail customer focus will be a
drag on results for a number of quarters. While
we view the move to realign operations to fo-
cus on core retail customers as prudent, we
see the overhang from its remaining mortgage
assets and the dilutive capital infusion out-
weighing the near-term positives that we have
seen in its retail metrics. We anticipate further
write-downs in the home equity loan portfolio in
2008 and increased loan loss provisions for first
lien holdings. While we see Citadel's invest-
ment providing ETFC with much needed capital
and balance sheet stability, we view the terms
as unfavorable to existing shareholders.
➤ Risks to our opinion and target price include in-
creased price competition in the retail busi-
ness, higher interest rates, and smaller write-
downs in the remaining mortgage portfolio.
➤ We arrive at our 12-month target price of $4.00
by applying a 0.8X multiple to ETFC's 12-month
projected book value per share, a discount to
peers. We think a discount is warranted by un-
certainties surrounding ETFC's mortgage and
securities exposure and a challenging market. "

Metrics, Mortgages and Analysts

OK,Cindy,you don't want to talk about Layton and Enron,what about his compensation?

On 3-2-08,the day he's named CEO,
1.8 million shares land in his account and no one mentions it as compensation???
Doesn't look like they're options but maybe they're restricted?
Wondering if I missed a filing detailing this?

biz.yahoo.com/t/28/382...

Metrics, Mortgages and Analysts

...."thats makes me "queasy" (not in 1999 right now in 2008)".

Sorry for your delicate condition,try a bromo, but my questions are valid and relevant.Cindy is writing pump pieces,cherry picking only the best looking data to sell her position.
Simple example,Cindy cites the S&P upgrade and quotes the analyst who sees signs of stability but conveniently leaves out that S&P simply went from sell to hold and set a target of $4,about where the stock was when the upgrade came out. Then she focuses on the BMO guy raising the target to $6. I ask why the BMO analyst who got it so wrong last year should be trusted now? That's in addition to conveniently leaving out Layton's little brush with scandal while asking readers to buy into his pronouncements and not acknowedging he was not the first choice for CEO and hasn't helped the stock price.

Cindy is on record on the yahoo board of planning this series of pump pieces in collusion with other well known pumpers. Readers should know that. I'll keep pointing out to the unsuspecting what she's doing,the record of pump pieces here is clear:

Metrics, Mortgages and Analysts
on Jun 20, 2008 about AMTD, ETFC, SCHW
S&P Upgrades E*Trade Despite Struggling Financial Sector Peers
on Jun 12, 2008 about ETFC
E*Trade's 'First In, First Out' Position: Yes, 111M Shorts Can Be Wrong
on Jun 11, 2008 about ETFC
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

Metrics, Mortgages and Analysts

Well,that's it I guess.
I've been dismissed by Queen Cindy.
If there's anyone still reading this dreck I suppose I'll just let you figure it out.