E*Trade (ETFC) seems to have finally stopped its long, quiet march toward zero, but the stock is still stuck in the dumpster because of the company’s inability to get out from under its $12 billion home equity loan portfolio. This said, E*Trade has improved its disclosure and continues to strengthen its management team. Both should make raising additional cash and restoring credibility easier.
The Wall Street Journal also suggests that Citadel, the giant hedge fund that bailed out E*Trade last fall, is getting impatient–and that this drove the company to appoint Chairman Donald Layton (who joined the board at the time of the bailout) as CEO. Layton is a former vice chair of JP Morgan Chase, and the WSJ suggests that his hiring is a step toward positioning E*Trade for a sale.
The quickest route to profit for Citadel is to find a way to ditch E*Trade’s bank division (where the ghastly home equity portfolio lives) and sell off the profitable brokerage business.
The Chronicles of E*Trade
E*Trade: Better Disclosure, Finally, But Needs More Cash
ETrade Bounces Off The Bottom
Is E*Trade Revisiting its “No Bankruptcy” Vow?
eTrade Still Playing Fast and Loose With Facts?
How to Destroy a Company in 5 Short Months: An E*Trade Financial Seminar
Cost of E*Trade’s Gambling Debts: $9+ Billion and Counting
E*Trade’s Citadel Deal Cuts Existing Shareholders in Half
E*Trade Saved By Hedge fund Citadel
E*Trade on the Block
E*Trade’s Desperate Ads Crush Stock Again
E*Trade CEO Denies Bankruptcy, Risks Jail Time
E*Trade to Customers: Please Don’t Take Money and Run!