TD Ameritrade's Debt Draws Eager Buyers

At that point, any of the bigger players that may be laying in the weeds -- TD Ameritrade, which has a very acquisitive past, and its largest rival Charles Schwab Corp.(SCHW) come to mind -- could decide to make a move before the shares get too rich.

E*Trade shares closed a penny higher at $1.64, putting the stock more than 5% above where it ended last week and just ahead of its 50-day moving average. The issue's 200-day moving average is $1.52. Volume totaled nearly 270 million for the past two sessions, and reached 67.1 million for Friday's session. Based on Thursday's close, the shares were up 73% for the past 52 weeks, but were still sitting at a little more than half their high for the year of $2.90 set in late April.

Meanwhile, TD Ameritrade's stock closed down 10 cents at $20.91, leaving it roughly flat for the week, despite the deal talk. The shares, however, reached their 52-week high of $21.30 on Tuesday, despite being up more than 100% for the past year, and the gradual appreciation from both the 50-day and 200-day moving averages ($20.08 and $18.67 respectively) suggests that if performance holds up, they may have more room to run.

In that scenario, armed with a strong currency in the form of its stock, a fresh slug of debt and more than $6 billion in cash, TD Ameritrade could go shopping. Asked about strategy in general and E*Trade in particular during the company's conference call in late October to discuss its fiscal 2009 results, Tomczyk said TD Ameritrade was still thinking through its strategic options for the coming year.

"Whatever has value to our shareholders is what we'll do," he said. Considering how well TD Ameritrade shares have held up despite the deal talk, shareholders may be telling Tomczyk where they think the value is.

Written by Michael Baron in New York.

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