Al the pal

Why Schwab’s Move into ETFs Could Be Big

The fee based revenue that Schwab will generate in future years is going to be huge because of this.

TD Ameritrade-E*Trade Deal Needs to Happen

What are the certain conditions that Ameritades CEO mentioned? It is ETFC selling off their problem loans to most likely Citadel for pennies on the dollar, just like they did with their primary mortgage loan portfolio. If that happens a buyout could happen, but the billions of dollars hit that would result as firesale with the ehlocs wipes out any potential premium in a buyout. With a heloc selloff and a willing buyer, shareholders would get between $1.50 and $1.75 a share which makes this stock at its current price a horrible investment.

TD Ameritrade And E*Trade: Wedding Bells?

ETFC shareholders are delusional if they think a buyout is going to happen while there is still so much HELOC loan exposure, the worsening employment picture means that things are not going to turn around anytime soom. Both Schwab and Ameritrade have stated they have no interest whatsoever in acquiring ETFC's problem loans. The only way a buyout could happen is if ETFC could spin them off to Citadel for another pennies on the dollar scenario, leaving shareholders then holding a pure brokerage stock, as Trone has pointed out however, that dramatically lowers the value of the company.

E*Trade: Very Undervalued

ETFC is a penny stock fools dream. Lots of hype with horrible financials. The company is and has been operating in the red with no end in sight because of their huge and horrible HELOC problem. Short this stock and any fools rally.

Charles Schwab on the Auction Rate Debacle (WSJ)

ARS were around for 20 years without a problem. The ratings agencies all had them rated as AAA. Given that, How in the world could anyone other than the underwriters who were not disclosing the problems possibly have known that they were about to, after 20 years have a problem? No one knew. For 20 years they had been viewed as safe investments. Cuomo is going to lose this one. Common sense will rule out.

Citadel Does an About-Face on E*Trade

You have got to be able to survive the writedowns. The OTS will shut them down for lack of capital next year unless they find another white knight but they have pretty much run out of options now with the debt being restructured already and the huge dilution factor.

Taking dilution into account, if they did manage to survive by erasing their bad loans miraculously they are worth somewhere between .80 and $1.20 a share.

Citadel Does an About-Face on E*Trade

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.

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.

Will TD Ameritrade or Charles Schwab Buy Up E*Trade?

Just because ETFC 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.

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.

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.

Charles Schwab: Marketing Products That Are Too Good to Be True?

Hey dummy, ARS were around for over 20 years without ANY problems, were rated AAA by the rating agencies and they continue to pay interest. The fact that the liquidity dried up was the underwriters problem and it was their fault for not disclosing it, not Schwabs. With re: to Yieldplus, duh-like the others said, no risk-no return, in order to get a better yield more risk needed to be taken. Again, how is Schwab responsible for a credit crises that no one saw coming with risks that were clearly outlined in their prospectus?

E*Trade: Business Has Improved

Duh- Ever hear of the words MASSIVE DILUTION? Even if ETFC does survive, which is still highly unlikely future earnings per share just got crushed and have the potential to erode further via the zero coupon bond offering.

The money raised in the offering does not even come close to what is going to be necessary to cover future loan losses. ETFC bought itself a short term reprieve from once again having to tap funding sources in order to cover their ongoing losses.

ETFC's past earnings were inflated by their loan issuances, those are gone now. The lower margin brokerage business even in its heyday in the 90's never was able to bring in the revenue or earnings necessary to cover their curent loan losses.

E*Trade: Time to Go Long

ETFC is living on borrowed time. Look at a few basic facts. ETFC still has a huge debtload, by exchanging the current debt for a zero coupon convertible note all they are in essence doing is creating a ballon payment at the tail end of a mortgage. If those notes ever get converted to stock you would have more massive dilution to such an extent that the future EPS would get crushed. If they don't get converted, ETFC has a ballon payment of extremely high proportions.

The speculation that a rival may buy them out isn't very realistic in my opinion. ETFC still has a terrible loan portfolio that an buyer would have to contend with and with both Schwab and Ameritrade being more fiscally conservative companies it is highly improbable that they would want to assume that portion of ETFC. The other possibility of course is that ETFC sells off the brokerage assets to a rival, and uses the proceeds to pay down the debt and leaves the rest to stregthening the remaining bank, a bank that is currently just a dry hole that is not making any fresh loans to generate revenue.

The capital raised in the secondary offering, and the debt exchange if it goes through does not stop ETFC's loan portfolio from having additional losses. Even though in the last quarter some metrics of it improved, it still is losing over 300 million per quarter. The money raised after the SPO only extends the time slightly before the OTS is back again telling ETFC to raise more capital. At some point in time the market is going to say enough is enough. Dilution at the extent that ETFC is doing is not beneficial to shareholders. Shareholder value will continue to deteriorate either through dilution or bankruptcy.

E*TRADE Buy As Much As You Can

ETFC is living on borrowed time. Look at a few basic facts. ETFC still has a huge debtload, by exchanging the current debt for a zero coupon convertible note all they are in essence doing is creating a ballon payment at the tail end of a mortgage. If those notes ever get converted to stock you would have more massive dilution to such an extent that the future EPS would get crushed. If they don't get converted, ETFC has a ballon payment of extremely high proportions.

The speculation that a rival may buy them out isn't very realistic in my opinion. ETFC still has a terrible loan portfolio that an buyer would have to contend with and with both Schwab and Ameritrade being more fiscally conservative companies it is highly improbable that they would want to assume that portion of ETFC. The other possibility of course is that ETFC sells off the brokerage assets to a rival, and uses the proceeds to pay down the debt and leaves the rest to stregthening the remaining bank, a bank that is currently just a dry hole that is not making any fresh loans to generate revenue.

The capital raised in the secondary offering, and the debt exchange if it goes through does not stop ETFC's loan portfolio from having additional losses. Even though in the last quarter some metrics of it improved, it still is losing over 300 million per quarter. The money raised after the SPO only extends the time slightly before the OTS is back again telling ETFC to raise more capital. At some point in time the market is going to say enough is enough. Dilution at the extent that ETFC is doing is not beneficial to shareholders. Shareholder value will continue to deteriorate either through dilution or bankruptcy.

E*Trade: Living on Borrowed Time?

If anyone were seriously interested in buying out ETFC then why didn't they express an interest when it was down at 50 cents a share pre-dilution?

It is extremely unlikey that the leading candidates to buy out ETFC, that being Schwab and Ameritrade will make any overture for the entire company as both companies probably want nothing to do with ETFC's outstanding toxic loans. Those loans have not gone away since the SPO, it just raised a little bit of capital to cover their ongoing losses.

Just because they Citadel is converting a bunch of their debt from high yielding debt to zero coupon convertible debt the fact remains for shareholders that it is still debt and Citadel will get payment for it before any shareholders if there is a buyout.

Citadel has been a smart cookie in getting the price of their bonds up from 60 cents on the dollar back to above par but by doing so they have done it at the expense of the shareholder. I totally expect that trend to continue. Citadel gets their investment back and shareholders get left with a diluted shell of a company.

Typical penny stock scam but on a larger, more public scale.

Here's Why E*Trade's Customers Are Not Happy

As much as I believe ETFC is going to be out of business sooner rather than later I don't believe that has anything to do with their customer service. The guy who posted the story about the funds availability was most likely in error as he probably did an ACH transfer and not a fed wire and his 12 day restriction probably included a weekend. ETFC's site states the following for initial deposits: Initial Deposit. All initial deposits made by an existing or new customer for an additional or new account that is funded from ACH debit entries that we originate, will be available on the ninth business day after the day we originate the transaction.

ACH Debit Entries. For all subsequent deposits, funds received from ACH debit entries that we originate will be available on the evening of the third business day after the day of deposit .

Special Rules for New Accounts. If you are a new customer, the following special rules will apply during the first 30 days your account is open.

Funds from electronic direct deposits (i.e., wires and ACH credit transfers) to your account will be available on the day we receive the deposit. Funds from deposits of cash, wire transfers, and the first $5,000 of a day's total deposits of cashier's, certified, teller's, traveler's, and federal, state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you and you may have to use a special deposit slip. The excess over $5,000 will be available on the fifth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,000 will not be available until the second business day after the day of your deposit. Funds from all other check deposits will be available on the fifth business day after the day of your deposit.

Of course ETFC's personal customer service is going to trail that of rivals such as Schwab and Fidelity. Those companies have a multitude of employees there to assist people in person or on the phone which ETFC does not employ, that is why commissions at ETFC are cheaper. If you want customer service you must be willing to pay for it. Employees that provide customer service don't work for free.

E*Trade: Why the Strange Earnings Report?

Maybe in the future you guys will start to listen to the comments made by the company since everything they said has panned out. ETFC's future is bleak to say the least. The only thing on the horizon believe it or not is additional dilution as they reinstitute the suspended 150 million program. One must begin to wonder why they are trying to keep it afloat. Could it be that they know that once the hammer comes down that they will all be unemployed?