Hier der Text: (mT)

verfasst von DT, 12.11.2007, 21:17

-->Man sieht nur keine Schlangen, weil ETrade eine rein elektronische Bank ist.

Gruß DT


Stocks in the News November 12, 2007, 2:35PM EST


E*Trade's Meltdown

The stock price gets slashed in half after the online brokerage says it can't predict new credit losses. Will customers stick around?

by Ben Steverman


After its stock's value was cut in half Nov. 12, E*Trade Financial (ETFC) rushed to reassure customers and investors that its deteriorating financial situation wouldn't be fatal for the firm.

The problem is that E*Trade had very little to say. No one, including E*Trade execs, really knows how bad things can get.

On Nov. 9, news arrived of more hits to the online brokerage's $3-billion portfolio of credit derivatives. In October, E*Trade announced almost $200 million in losses due to the tough credit conditions, prompted by worries about risky mortgage debt. Now, thanks to rating agency downgrades and more problems in the credit markets, the company says it can't stick by those figures or its previous earnings predictions.

"Actual securities-related losses will depend on future market developments, including the potential for future downgrades by rating agencies, which are extremely difficult to predict in this environment," the company said in a statement."Accordingly, management believes it is no longer beneficial to provide earnings expectations for the remainder of the year."

E*Trade is essentially saying,"We don't know how bad things could get," says Morningstar (MORN) analyst Patrick O'Shaughnessy."That uncertainty is letting Wall Street's imagination run."

And run they did — run away. In the early afternoon on Nov. 12, E*Trade shares were off 55%, trading below $4 after closing the previous session at $8.59. In June, the stock traded above $25.

In perhaps the scariest assessment of E*Trade's situation, Citigroup (C) analyst Prashant Bhatia downgraded the stock to sell from hold, and placed the probability of bankruptcy at 15%. He worried that the recent news would cause customers to pull their money out of E*Trade bank accounts.

The federal government insures deposits up to $100,000 for each bank customer, but half of E*Trade's deposits, or $15 billion, are over that mark, Bhatia says. There may other protections for E*Trade account holders,"But in our view customers may withdraw assets first, and ask questions later," Bhatia wrote. That would create a classic"run on the bank" scenario and could force E*Trade to sell its assets to give customers back their cash.

E*Trade tried to prevent this by sending an email to E*Trade customers Nov. 12."We could absorb an immediate write down in excess of $1 billion and still remain well-capitalized," the note from President Jarrett Lilien read."It is our expectation that news in the market will get worse before it gets better, and, armed with these expectations, we are taking prudent measures to effectively manage the company's balance sheet," he added.

Bhatia estimates that if E*Trade were forced to liquidate its portfolio, it could sustain more than $5 billion in losses.

However, this is a worst case scenario. The immediate concern is $450 million in assets that are considered the riskiest of E*Trade's holdings. Of those, about $50 million was recently downgraded by credit ratings agencies, and more downgrades could be on the way.

Morningstar's O'Shaughnessy says huge losses above the $1 billion threshold are within"the realm of possibility," but unlikely."It's hard for me to see where that billion dollars could come from," he says.

The irony for E*Trade is that its credit losses arrive as its core business — offering a range of financial services through a bank and online brokerage — hums along. On Nov. 12, E*Trade reported results from October showing total client assets up 4% and its strongest trading volume ever.

The weak balance sheet combined with the strong business results lead some to think E*Trade could be a takeover target. But a buyout might have to wait a while, until the potential credit losses become clearer. Until then, buyers may be very wary.

Steverman is a reporter for BusinessWeek's Investing channel.

http://isht.comdirect.de/charts/big.chart?hist=6m&type=CONNECTLINE&dsc=abs&ind0=VOLUME&&currency=&&lSyms=ETFC.NAS&lColors=0x000000&sSym=ETFC.NAS&hcmask=

Thread gesperrt

 

gesamter Thread:

• Der nächste Bank Run (in USA): ETrade (mTuL) (o.Text) - DT, 12.11.2007, 21:13
  • Hier der Text: (mT) - DT, 12.11.2007, 21:17
    • Wie sind die Kunden in solch einem Fall geschützt? - Albrecht, 12.11.2007, 23:00
      • wer handelt heute noch echte Aktien? Die CFD's gehen wohl eher in den Kamin... (o.Text) - CaptainB, 12.11.2007, 23:11
      • Schutz 100 TUSD cash durch FDIC und 500 TUSD mittels SIPC für Securities (mT) - DT, 12.11.2007, 23:16