Etrade Potential Bankruptcy?

[DanielDayLewis]

Correct me if I'm wrong but it would benefit citigroup if etrade goes bankrupt right? They obviously can't "lie" but they want to report this news in the most damning manner possible.

[ArturiusX]

Little blog post for those interested:

http://globaleconomicanalysis.blogsp...ankruptcy.html

[ahnuld]

just to clarify for people, pig4bill and SN are right and you should be protected for the most part. If, for some reason, you have a huge cash position over 100k buy something safe. If bankruptcy occurs im pretty sure theyll cover all the cash anyways, even over 100k, but it cant hurt to buy a AAA bond ETF in the mean time.

[stephenNUTS]

[ QUOTE ]
Little blog post for those interested:

http://globaleconomicanalysis.blogsp...ankruptcy.html

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You gotta love these WS ANALysts:

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[/ QUOTE ] He cut his price target to $7.50 from $13, while Banc of America analyst Michael Hecht reduced his target by $1.50 to $10.50, citing diminished earnings visibility. Hecht maintained his "neutral" rating on the stock.

My comment: You have to love this. Citigroup is openly discussing bankruptcy and putting a sell rating on the stock that is now trading under $4. But the price target is $7.50. Meanwhile Banc of America cuts the target to $10.50 while remaining "neutral" on the stock. What planet are these guys on? Bizarro World?

[octaveshift]

[ QUOTE ]
Little blog post for those interested:

http://globaleconomicanalysis.blogsp...ankruptcy.html

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What a bunch of [censored]. This blogger is working under the assumption that everything the CITI analyst said was correct.

Here's some (sanity?) from Bloomberg:

Nov. 13 (Bloomberg) -- E*Trade Financial Corp., the online brokerage whose shares plunged 59 percent yesterday, is ``highly unlikely'' to declare bankruptcy, BMO Capital Markets said.

E*Trade shares surged the most in six years, adding 61 cents, or 17 percent, to $4.16 as of 9:48 a.m. in New York. The stock has lost 84 percent this year through yesterday, compared with an 18 percent slide for the Standard & Poor's 500 Financials Index.

``Management has stated that the company could absorb $1 billion in writedowns and still maintain well-capitalized status,'' analyst Michael Vinciquerra wrote in a note. ``The company also indicated to us that it is spending a great deal of time looking for ways to cap or lay off its potential losses.''

``Withdrawals would have to be massive for the company to have major issues,'' Vinciquerra wrote. ``A key fact that some people seem to be ignoring is that E*Trade's deposits have actually grown for the last 13 months consecutively.''

The Atlanta-based analyst maintained the ``outperform'' rating he has had on the stock since starting coverage in April. His forecast that the New York-based brokerage will report a profit of 89 cents a share this year may be ``too optimistic based on recent commentary,'' Vinciquerra wrote. He expects profit of $1.46 a share next year.

E*Trade plunged yesterday after the third-largest online brokerage forecast a decline in fourth-quarter earnings and Citi Investment Research analyst Prashant Bhatia said the company may go bankrupt. There's a 15 percent chance the company will seek protection from creditors after management ``put the viability of the franchise at risk,'' Bhatia wrote in a note.

Vinciquerra said the company would probably be acquired before filing for bankruptcy.

``In the event that it proves necessary in a worse-case scenario, we also believe there are buyers that would find E*Trade's entire business highly attractive at a meaningful premium to current levels,'' he wrote.

BMO Capital Markets is a unit of Bank of Montreal, Canada's fourth-largest bank.

[slideaway]

According to reports from Bloomberg, BMO Capital analyst Michael Vinciquerra said it is "highly unlikely" that E*Trade Financial (Nasdaq: ETFC) will declare bankruptcy, as was suggested by a Citigroup analyst yesterday.

Shares of E*Trade sank 59% yesterday as investors fled after Citigroup downgraded the stock to Sell and said the company could see clients pull their money and there was a 15% chance of bankruptcy. The downgraded followed a disclosure of more mortgage and CDO exposure from the company.


Share price seems to be recovering today, think it will persist?

LC

[octaveshift]

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According to reports from Bloomberg, BMO Capital analyst Michael Vinciquerra said it is "highly unlikely" that E*Trade Financial (Nasdaq: ETFC) will declare bankruptcy, as was suggested by a Citigroup analyst yesterday.


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Did you read the post above you, by chance?

Apparently not.

[ahnuld]

from what I understand they made 650 million in trading commissions last year. They have 427 million shares outstanding. If they are really cutting back on their mortgage spending, costs are either zero or that analysts earning projections are wrong. Maybe they will continue in consumer loans and banking though. The point is its very unclear from their current statements what their business will entail next year. I still think it may end the year at 10 a share but its just too risky and unclear to take a position in for me.

[Groty]

ETFC has held two non-earnings related conference calls to provide additional clarity on the composition of their mortgage exposure since the first "potential bankruptcy" rumor started circlulating in August. ETFC prepared a detailed slide presentation for each call. ETFC filed those presentations with the SEC under form 8-Ks. Links below.

Here's the more recent version:

http://www.sec.gov/Archives/edgar/da...9928-index.htm

Here's the older, less relevant version:

http://www.sec.gov/Archives/edgar/da...2439-index.htm

[octaveshift]

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if u really have balls, buy e-trade on the speculation it will get bought out.

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I got in yesterday. Up over 45%.

I love panic.