Hitch in E*Trade (ETFC) Fire Sale Plan: Scary Black Box

Public investors aren’t the only ones in the dark and terrified about the losses hidden in E*Trade’s (ETFC) mortgage portfolio: potential saviors AmeriTrade and Charles Schwab are, too. According to the WSJ, this terror is getting in the way of the reported fire-sale of the company that sent the stock soaring 25% on Friday.

Another problem: some fear the Office of Thrift Supervision (a bank regulator) will insist that any buyout or cash infusion proceeds immediately be injected into E*Trade Bank–the part of the company that has been crippled by the lousy mortgage bets–which could leave an undefined amount for investors in the corporate parent, E*Trade.  This makes calculating a takeout price difficult.

So, first order of business for E*Trade on this gloomy Cyber Monday? Figure out how much money it has lost.  In the meantime, investors should probably hold the champagne.

See Also:
E*Trade on the Block
E*Trade’s Desperate Ads Crush Stock Again

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