danS

Citadel Does an About-Face on E*Trade

Once the write downs are finished E trade is worth AT LEAST 7 or 8 billion dollars or $2.50 a share (2.8 billion shares outstanding, including the Citadel dilution) . Citadel will gladly take this and because their convertible bonds make them essentially the majority stock holder, it will be entirely their game to call.


On Sep 02 02:37 PM Al the pal wrote:

> Just because ETrade is a penny stock doesn't mean it is a low price.
> The company doesn't have any earnings and is expected to continue
> to lose money through next year. They haven't even made a dent in
> reversing their loan losses that continue to add up every quarter
> so their ongoing brokerage business profits get swallowed up by their
> banking losses 2 to 1.
>
> There are many obstacles to a buyout.
>
> 1. The huge debt/equity ratio. Restructureing the bonds didn't erase
> the debt, only the interest payments.
>
> 2. The order flow deals with Citadel. No buyer will want them.<br/>
>
> 3. Ongoing loan losses.
>
> 4. No TARP. Inadequete bank balance sheet.
>
> 5. A retail account base that has small account balances when compared
> to their peers Schwab and Ameritrade.
>
> 6. The huge amount of dilution that has occured and is ongoing. Most
> of the bulls fail to realize that ETFC has a secondary offering ongoing
> where they can continue to dilute their equity.
>
> 7. The huge dilution factor of the converible bonds.
>
> 8. Citadel- No one wants to have them as a major shareholder because
> they are a hedge fund.