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  #51  
Old 11-14-2007, 12:35 PM
MrBlue MrBlue is offline
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Default Re: Etrade Potential Bankruptcy?

Also when a deal is announced, volatility collapses making options much much cheaper.

If you bought ETFC options the last several days, you're paying a lot for the options due to the volatility of the underlying stock.
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  #52  
Old 11-14-2007, 12:38 PM
ahnuld ahnuld is offline
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Default Re: Etrade Potential Bankruptcy?

well the CEO cancelled a presentation yesterday which makes me think either they have big news tomorrow on their marking to market or they organized a buy-out. In either case ill take the money and wait and see. If its good news tomorrow I might buy equity, but if you guys, supposedly knowledgeable people, are moving your money off, mom and pop will definitely run out of an illogical fear of bankruptcy as well.
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  #53  
Old 11-14-2007, 01:39 PM
octaveshift octaveshift is offline
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Default Re: Etrade Potential Bankruptcy?

[ QUOTE ]
... but if you guys, supposedly knowledgeable people, are moving your money off, mom and pop will definitely run out of an illogical fear of bankruptcy as well.

[/ QUOTE ]

I haven't moved a dime out of my Etrade account. Nor do I plan to.

And I think a buyout would be for considerably more than $6 a share. Don't worry.

Etrade has the best trading platform in the business. Their sub-prime exposure is a lot smaller than people think. I believe it's a good company, and still a great buy at these prices.

Lehman says:

ETFC Target $19

"Last week, we hosted management of Etrade for a series of investor meetings. We walked away from the meeting and subsequent analysis of the company's mortgage exposure with the belief that Etrade has envisioned fairly difficult market conditions over the next several quarters, and that the provisions for loan losses that it anticipates taking will more than cover the likely losses through the end of next year. We therefore believe that the shares are overly discounted at current levels, and that stock represents an attractive buying opportunity."
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  #54  
Old 11-14-2007, 02:14 PM
ahnuld ahnuld is offline
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Default Re: Etrade Potential Bankruptcy?

meh, I really want to straddle etrade going into tonight. Anyone have nay good tips or web links on straddeling? I really am going in blind here, I just think that by friday it will either be up or down 50% from current levels.
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  #55  
Old 11-14-2007, 02:50 PM
octaveshift octaveshift is offline
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Default Re: Etrade Potential Bankruptcy?

[ QUOTE ]
meh, I really want to straddle etrade going into tonight. Anyone have nay good tips or web links on straddeling? I really am going in blind here, I just think that by friday it will either be up or down 50% from current levels.

[/ QUOTE ]

Just post a minbet UTG obv.

In all seriousness, a straddle would probably be the best play. It's definitely gonna move one way or the other. [img]/images/graemlins/smile.gif[/img]
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  #56  
Old 11-15-2007, 04:15 AM
pig4bill pig4bill is offline
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Default Re: Etrade Potential Bankruptcy?

What's the big deal about Friday? Earnings?

If you're taling about the FASB rule, don't expect any new writedowns until the next earnings. Etrade has been writing down their portfolio for the last few months already, unlike some of the mega-banks.

If you want to open an options account in order to put on a November straddle, I don't think you'll have time. [img]/images/graemlins/smile.gif[/img]

Ironically, ETrade has one of the best options platforms among discount brokers.
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  #57  
Old 11-15-2007, 04:28 AM
octaveshift octaveshift is offline
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Default Re: Etrade Potential Bankruptcy?

Good article in the WSJ earlier:

Bids or Offers for E*Trade?

This is one trade Mitch Caplan won't be calling his discount broker for.

Mr. Caplan, chief executive of online brokerage firm E*Trade Financial Corp. -- which saw its share price tumble 59% on Monday amid worries about mortgage securities on its books, before partially recovering in the past two days -- is now faced with two main options as his company struggles to regain its footing, according to people familiar with the matter.

In recent days, these people say, the firm has received calls from various parties suggesting a cash infusion into E*Trade similar to the $2 billion investment that Bank of America Corp. recently made in Countrywide Financial Corp., which gave Bank of America a stake in the nation's biggest mortgage lender.

At the same time, Mr. Caplan, who led the brokerage firm into banking and mortgage investments, has been weighing the pros and cons of selling E*Trade to a rival, these people say.

Monday's drop in E*Trade's stock price, fueled by an analyst report suggesting there could be a run on deposits at E*Trade's bank, was on the heels of four separate company announcements about the deteriorating state of its mortgage holdings. Those holdings include mortgages it has bought and originated, and assets backed by mortgages that have plummeted in value.

The company is sitting on a mortgage portfolio, including everything from home loans to home-equity lines, valued as of Sept. 30 at $29.3 billion, and it owns mortgage-backed securities valued at $12.4 billion. To date, it has announced $197 million in pretax write-downs on its securities portfolio, and has set aside $237.8 million in loan-loss provisions.


The Virginia-based Mr. Caplan, who backed out of a high-profile speaking engagement yesterday at a Merrill Lynch & Co. investment conference, is all but living in New York these days -- working to steer E*Trade out of its predicament and hang on to his job, which is on the line in light of the recent write-downs.

A cash infusion has some benefits. The firm's stock-market capitalization has sunk to $2.28 billion from $10.9 billion in recent days, and a cash infusion would help restore investor confidence. As well, the stock would likely rise with such a vote of confidence.

For now, the company, with 3.7 million customers and $40 billion in bank deposits, says it is "well capitalized by regulatory standards" and would continue to be so even if it absorbed an immediate write-down of more than $1 billion.

Mr. Caplan could also sell the company, but that option is fraught with issues. The most likely potential buyer is TD Ameritrade Holding Corp.

There are benefits from the two joining forces. Namely, the online-brokerage business is a game of scale, and customer accounts can be added or transferred at almost no cost.

Some industry executives say the long-term savings of an E*Trade/Ameritrade combination would be $600 million annually. Add those savings up over five or so years and such a deal would pay for itself.

As long as Ameritrade can get assurance that E*Trade's bank is fundamentally sound, it could make an offer well in excess of the current stock price. But here's the catch: If the bank is restored to health, E*Trade shareholders would likely demand a higher price for their shares, making any such deal less attractive to Ameritrade.

Another option: Ameritrade could lobby to purchase only the electronic-brokerage assets of the company.

That aside, Ameritrade has long expressed private reservations about the amount of risk on E*Trade's books because of its mortgage holdings. Now, should Ameritrade merge forces with E*Trade, it would inherit any legal or regulatory troubles that could stem from E*Trade's current predicament.

People familiar with the matter say that Ameritrade is keeping a close eye on E*Trade, and that its board in recent weeks has talked about a possible bid.
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  #58  
Old 11-16-2007, 11:49 PM
Preem Preem is offline
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Default Re: Etrade Potential Bankruptcy?

[ QUOTE ]
Are my stock holdings insured/protected or is it possible that I will lose these holdings if they go bankrupt?

[/ QUOTE ]
E*Trade claims that your holdings are insured by the SiPC up to $500,000 including $100,000 for cash claims. They also claim that they offer an additional $150,000 insurance per account through a London insurer.

If they are telling the truth, then you are fine as long as your holdings don't exceed $650,000. However, if they go under, your assets may be frozen while they sort things out.
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