danS

E*Trade: Why the Strange Earnings Report?

Hirendu -

They do need equity to please the bank regulators. It doesn't really matter how they spin the numbers they are going to need the money either this quarter or the next. However this is the worst time to be looking for equity in the marketplace. If the stock is at $3 a share Layton may feel it is overvalued considering their circumstances and at a price that makes getting equity at a dilution acceptable to stockholders impossible. I think the Citadel offer may be the best one they can get. Remember they have a $2 billion dollar investment in Etrade they need to protect.