Here’s your quiz for the morning: When a banking and brokerage firm buys ads in national publications assuring customers that they won’t suddenly see their savings evaporate (and makes “Asset Protection” the feature exhibit on their web site again–see below), they are doing this because:
- It’s a great marketing strategy!
- Panicked customers are yanking their money and running for the hills.
Our money’s on No. 2. Which would explain why eTrade’s stock is again streaking toward zero after yesterday’s WSJ ad (the stock dropped 20% yesterday and, as Paul Kedrosky notes, is approaching the lows it hit after the Citi analyst invoked the dreaded “b” word). We also note that in eTrade’s lengthy description of the various insurance plans it has that will help customers avoid losing everything if the company croaks, there is a tacit acknowledgment that money is streaming out the door:
The old adage “there is no such thing as bad publicity” does not apply to E*TRADE FINANCIAL this week...
We reiterate our previous convictions about how e*Trade can save itself: 1) sell the company, 2) get a massive cash infusion. We admired CEO’s emphatic (and risky) bankruptcy-denial on CNBC, but it didn’t work.
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