This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

E*Trade Cancels Its Own 'Sell Order'

NEW YORK (TheStreet) -- E*Trade Financial (ETFC) late Thursday put an end to speculation that its strategic review would yield a company sale.

Rejecting pressure from its largest shareholder Citadel to sell itself to an online broker competitor such as TD Ameritrade (AMTD) or Charles Schwab (SCHW), E*Trade chief executive and interim chairman Steven Freiberg said, "Following this review by our Board, the management team will continue to execute on our strategy designed to create value for both our stockholders and our customers."

E*Trade shares fell more than 5% in after-hours trading to $8.96. The pioneer in online retail investing of stocks and bonds, with $182 billion in customer assets worldwide, has seen its stock fall more than 40% year to date.

Earlier in the year, Griffin asked E*Trade to consider options such as a company sale, and the company capitulated, hiring Goldman Sachs (GS) as an adviser on strategic alternatives. After two days of scheduled board meetings this week, the company ended its review without a sale proposal -- halting Citadel's more than three-month activist push. In July, Citadel wrote in a letter to E*Trade's management, "Since November of 2007, the board has continually failed to act in the best interest of E*Trade shareholders."

Chicago-based hedge fund Citadel, run by Ken Griffin who founded the fund using investment gains he made trading commodities from a Harvard dorm room, became one of E*Trade 's largest investors after investing $2.5 billion in the company in 2007 to help it avert a bankruptcy.

Since this time in 2006, the company's shares are down nearly 96%. The online broker was founded in 1992 and went public in 1996.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

In 2011, E*Trade has returned to profitability, earning roughly $162 million in the first three quarters of the year after losing $28 million in 2010. In 2009, the company lost $1.3 billion, only exceeded by its $1.4 billion 2007 loss as roiling markets soured trading volumes, customer accounts and a misplaced push into morgtages.

Other large E*Trade shareholders are Vanguard, Fidelity, TIAA Cref, T Rowe Price and hedge fund Omega Advisors run by Leon Cooperman, all with over 3% holdings in the New York-based company's shares. Cooperman, at October's Value Investing Congress, said that TD Ameritrade was E*Trade's most likely buyer.

For Citadel, the rejection is a blow to its 9.6% stake in E*Trade, the fund's second biggest holding overall to a $316 million investment in Apple (AAPL). Griffin's Citadel, during the time it's battled with E*Trade, has lost other wars. In August, the company scrapped a plan to become a full service investment bank and initiated layoffs.

-- Written by Antoine Gara in New York

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs