E*Trade Drops Bailout Bid; Volume Spikes

NEW YORK (TheStreet) -- E*Trade Financial (ETFC Quote) shares fell sharply on a pick up in volume Monday after the company said it withdrew its application for government bailout funds.

E*Trade Financial said in a regulatory filing that it withdrew its application for the Capital Purchase Program on Oct. 30 after the Office of Thrift Supervision requested that the company declare its intentions. E*Trade Financial said it decided to withdraw the application after recent capital raising activities and the reduction in interest bearing indebtedness resulting from the recent debt exchange transactions.

The Capital Purchase Program, or CPP, is conducted by the Treasury as part of the Troubled Asset Relief Program, or TARP, where the government provides cash to U.S. financial companies through preferred stock purchases.

Last week, E*Trade Financial reported a third-quarter loss of $832 million, or 66 cents a share, widening from the year-ago loss. Excluding a charge for a debt extinguishment, E*Trade posted a loss of 5 cents a share, beat the Thomson Reuters average estimate by a penny.

During the third quarter, E*Trade Financial completed a multi-billion dollar debt exchange offer, announced its top executive is stepping down at the end of the year, and raised roughly $147 million through an at-the-market common stock offering.

Shares of E*Trade Financial were dropping by 13 cents, or 8.9%, to $1.33, its lowest level of the session. More than 70 million shares changed hands by 2 p.m. EST Monday, compared to the stock's 50-day average daily volume of 111 million, according to the Nasdaq.