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E*TRADE Financial Corporation
Type	Public (NASDAQ: ETFC)
Founded	Palo Alto, California (1982)
Headquarters	New York City, USA
Key people	R. Jarrett Lilien, Acting-CEO, President, and Director Donald H. Layton, Chairman Robert J. Simmons, CFO
Industry	Financial Services
Products	Trading & Investing, Retirement & Planning, Banking & Credit Cards, Mortgage & Home Equity
Revenue	US$2.537 Billion (2005)
Net income	US$628.9 Million (2006)
Employees	4705 (2006)
Slogan	Be E*traordinary (pronounced as "extraordinary")
Website	www.etrade.com

E*TRADE Financial Corporation (NASDAQ: ETFC) is a financial services company based in New York, NY, United States. It is a holding company, the major business of which is an online discount stock brokerage service for self-directed investors. As a discount brokerage, it charges a smaller fee on each trade than a full-service broker. Investors can buy and sell securities such as stocks, bonds, options, mutual funds, and exchange-traded funds on E*TRADE's website, http://www.etrade.com. The company also offers banking and lending products such as checking and savings accounts, money market accounts, certificates of deposit, credit cards, and mortgages.

E*TRADE Financial Center, San Francisco

In 1982, William A. Porter and Bernard A. Newcomb founded TradePlus Inc. in Palo Alto, California. In 1991, Porter founded a new company, E*TRADE Securities, Inc., with several hundred thousand dollars of startup capital from TradePlus. E*TRADE offered its trading services via America Online and Compuserve. In 1994, its revenues neared $11 million (up from $850,000 in 1992), making TradePlus and its E*TRADE subsidiary the fastest-growing private company in the country. The company eventually underwent reorganization and emerged as the E*TRADE Group, with E*TRADE Securities as its principal subsidiary. ^[1]

In August, 1996 it went public with Silicon Valley heavyweight Robertson, Stephens & Company as the lead underwriter. In 2003, the company changed its name from E*TRADE Group Inc. to E*TRADE Financial Corporation. In 2005, E*TRADE Financial acquired Harrisdirect, formerly a discount brokerage service of Bank of Montreal, and BrownCo, formerly a discount brokerage service of J.P. Morgan. ^[2] E*TRADE's stock is traded on the NASDAQ under the ticker ETFC ^[3].

E*TRADE is regulated and licensed by FINRA.

On November 12th, 2007, E*Trade stock plunged 59% in one day amid concerns about unstable holdings on its books. E*Trade operates a bank working with mortgage loans, and invests in holdings backed by mortgages. Nearly all of E*Trade's assets are invested in mortgage or home equity related products. E*Trade stated in a filing that investment problems within these holdings would lead to 'bigger than expected losses'. This was followed by E*Trade's stock being downgraded by many Wall Street analysts, including Citi Financial, who moved E*Trade from hold to sell. The shares have fallen in value to their August 2002 level, as heavy trading wiped out 2.2 billion dollars of E*Trade's market value. Analysts indicate that bankruptcy may loom for E*Trade, and a complete sale of E*Trade cannot be ruled out. On November 14th 2007 the CEO of E*trade was interviewed on CNBC's Closing Bell where he openly explained the strength and condition of E*trade in a volatile market. He attributed the loss in market value to the one report by Citi's Analyst who was unsavy in his presentation to the public. Within the days following E*trade's stock has recovered a large portion of the November 12th loss. ^[4]. The following day, November 13th, the stock rebounded to close at $5, still well off its value before the collapse, when the stock was trading above $8.^[5].

On Thursday, November 29, 2007, the company announced a $2.55 Billion capital infusion from hedge fund Citadel. Under the deal, the company would sell its $3 Billion asset backed security portfolio, which yields more than 12%, to Citadel for $800 Million. E*TRADE took on a $1.75 Billion loan with a interest of 12.5%. Also as part of the deal, Citadel received 84 million common shares, or roughly 20% of E*TRADE at essentially no cost. When the news first broke out, E*TRADE shares traded up 25% before the market opened, but as the detail of the deal surfaced, the shares traded sharply downward for most of the day to end at a loss of more than 8%. The stock traded down another 5% the next day amid criticism of the deal by most analysts. Bank of America Analyst Michael Hecht points out that as a result of the deal shareholders will suffer a 40% earnings per share dilution with a 100% dilution of tangible equity.

Along with the $2.2 Billion write down on its asset-based securities portfolio, E*TRADE will also record a larger-than-expected fourth-quarter loss on its home equity loan portfolio that will result in an ending allowance of over $400 million.

• E*TRADE official website
• Yahoo! - E*TRADE Financial Corporation Company Profile
• Hoover's - E*TRADE Financial Corporation Company Profile
• E*TRADE Financial Corporation Company History
• Corporate Experience of New E*Trade Chairman Donald H Layton
• Time To Boost Your Trade

1. ^ Funding Universe - E*TRADE Financial Corporation History
2. ^ E-Trade to acquire BrownCo for $1.6B. San Francisco Business Times. September 30, 2005. Available at: http://www.bizjournals.com/sanfrancisco/stories/2005/09/26/daily46.html. Accessed September 12, 2007.
3. ^ Google Finance - NASDAQ:ETFC
4. ^ E*Trade Plunges 59% On Analyst Warnings; Bank Unit Goes Awry. Tuesday, November 13, 2007. Available at: - Wall Street Journal Accessed Tuesday, November 13, 2007
5. ^ Associated Press (November 13, 2007). E-Trade's Stock Recovers Much of Loss. Forbes.com. Retrieved on 2007-11-13.

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