E*Trade Chief Denies Bankruptcy Rumors
E*Trade Financial (ETFC) CEO Mitch Caplan on Wednesday "categorically" denied that the online brokerage firm was headed for bankruptcy, during an interview with CNBC.
E*Trade shares lost more than half their value on Monday after a Citigroup analyst suggested there could be a run on the company's bank. The speculation came after the New York-based brokerage firm announced late Friday that it will take further writedowns on its collateralized debt obligations, or CDOs, and second-lien securities portfolio.
Caplan said that the writedowns and negative news coming from E*Trade did not make the company more vulnerable to a buyout. Observers had renewed speculation that the online brokerage firm could be
"There's so many people that are interested in our franchise," Caplan said during the CNBC interview. "I think it does not make us any more or less vulnerable for a takeout."Still, Caplan did not rule out the possibility of a sale. Caplan's remarks to CNBC came after the CEO canceled a scheduled presentation slated for earlier in the day at a major investor conference, raising speculation about a possible sale or management change at the beleaguered firm. E*Trade, which provides online banking, brokerage and lending to retail and institutional customers, joined the likes of Countrywide Financial (CFC) and Washington Mutual (WM) and other smaller lenders hit hard by the housing downturn and mortgage deterioration, particularly as the secondary market for mortgages ground to a halt. The stock is down more than 80% this year. Market chatter earlier this year had TD Ameritrade (AMTD) and E*Trade discussing a possible merger. Shares closed up 54 cents, or 10.8%, to $5.54 on Wednesday.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV