When Ameritrade's (AMTD) - Get Report CEO resigned last week for "personal reasons," watchers wondered what the heck was going on, and then did what any good the-bull-market-isn't-over-yet investors would do -- started buying.

Ameritrade's stock has picked up about 14% since Tom Lewis' departure made headlines on Aug. 7. It has outpaced competitors like

E*Trade

(EGRP)

and

Charles Schwab

(SCH)

, as well as the

Nasdaq

.

But while visions of an Ameritrade takeover might be dancing in investors' heads like

sugarplums , they may want to temper their enthusiasm. Despite almost a year of consolidation talk, there has been little action. Ah, but those dreams continue.

Deutsche Banc Alex. Brown

analyst Glenn Schorr started coverage of Ameritrade Wednesday with just those thoughts -- and a buy rating. "While we anxiously await the conclusion of the

CEO search, we can't help but wonder whether this event could be the impetus for the company's sale." (Deutsche Banc hasn't done any underwriting for Ameritrade.)

Takeover Talk
Ameritrade has outpaced its peers, thanks to merger speculation.

Investors, particularly retail ones, judging by the recent Internet message board traffic, began asking questions last week about whether Lewis' departure means Ameritrade is on the block. Why else would a well-paid, enthusiastic CEO give up everything almost four years shy of his contract's expiration? What else is to become of a company whose founder was nearly retired and now must run the business?

But the answer is hardly so simple. For one thing, it's unlikely that Ameritrade would attract the attention of large brokerages that could afford its $2.5 billion market capitalization, in part because it's possible that they would gain few new customers. Many Ameritrade customers also have accounts at big brokerage firms. For another, Ameritrade's focus on trading would do little to help a buyer increase its asset base and assets are the current belles of the ball. (

TSC

looked at this issue recently.)

The company, too, says there's nothing up. "Ameritrade is not up for sale," says spokesman Mike Trainor.

A Renewed Battle

This isn't the first time the company has had to fight this battle. In March after the

Financial Times

said Ameritrade

was looking for a buyer, the company issued a statement saying it wasn't on the block.

And some of its biggest supporters -- the sell-side analyst crowd -- agree.

"I don't think there's anything out there. I think his resignation was for private and personal reasons," says Greg Smith, a

Chase H&Q

analyst. (Chase H&Q hasn't done underwriting for Ameritrade or Schwab but has for E*Trade.)

All the same, Ameritrade's stock has been creeping up during the past two weeks and analysts and investors concede that it's most likely because some stubborn investors aren't listening.

Too Narrow

One hedge fund analyst, whose firm owned Ameritrade as of June 30, says one problem with a takeover argument is that the company's "narrow and deep" strategy has limited its expansion and attractiveness. Under this strategy, Ameritrade has focused on trading, unlike other brokerages that have gotten into financial advice, asset management and banking as a way to diversify revenue and build assets. Schwab, for instance, bought

U.S. Trust

earlier this year and now offers more trust services, such as estate planning, to its customers.

And given that the most recent quarter indicated that self-directed investors aren't any better than their professional counterparts at making money in a weak market, finding other means of increasing assets is even more important, the hedge fund analyst says. (

TSC

recently

looked at this issue.)

There are other reasons Ameritrade may add little to a big broker. Last year, it commissioned a study that found that 44% of online investors have an account with an offline full-service brokerage and that online investors on average have two online accounts. For example, when

Wit Capital

(WITC)

hands over its brokerage operations to E*Trade as part of a merger of their investment banking businesses, about one-quarter of the Wit accounts will be duplicates.

A big broker also could just build its own online trading system, something

Merrill Lynch

(MER)

, for instance, has already done.

And for a last dose of reality, there's Lewis' employment contract, detailed in a filing with the

Securities and Exchange Commission

in May of 1999. Lewis couldn't be reached to comment. It shows that Lewis actually had financial motivation to stay -- particularly if a takeover was in the works. He had a sack full of options vesting this fall. And he signed a noncompete agreement, so it's highly unlikely that his new plans include joining another brokerage. In addition, he stood to collect severance for three years in the event that his responsibilities changed within two years of the company's being bought out. Those must be some kind of personal reasons.