PaulSD

Metrics, Mortgages and Analysts

Hopefully they can use this $511M to pay down some debt, reduce interest expense & improve earnings. Although its hard to see how liquidating a piece of itself for a measely $0.5B will help. If ETFC meets its target of 0.15cents per share @ 15X earnings by NEXT year, we get a stock price of $4.75... But they are encumbered by ~ 21Billion per share in debt!!!! Even if their cost of capital is a modest ~6% they will be servicing 1.2B per share in interest expenses which totally wipes out their earnings... That's why ETFC has a negative enterprise value. Shareholders are subordinate to bondholders. So, Ken Griffin is a value (vulture) investor alright - he's stealing your stock equity (earnings) as a bondholder (bond interest) and waiting for the stock to get pounded into the ground, then he'll use your harvested equity to buy back the company for pennies on the dollar.

True - Etrade isn't going out of business - but I doubt existing small time shareholders have any hope in this situation. You can "buy and hold" at these prices but the truth is that you will have to wait a very long time to see a decent return. This game wasn't meant for "retail" investors. The Gordon Geckos of the world have too much muscle.

Did the E*Trade Baby Pay Off?

Institutional buyers are coming in in droves. With lower ETFC price action and growing short interest I think ETFC = 16 - 32 is right...

The naked shorties are gonna get spanked hard sooner or later.