E*Trade Surges on Heavy Volume
NEW YORK (
) --
E*Trade Financial
(ETFC) - Get Report
shares surged as much as 11% on trading volume that was more than triple its average on Monday, despite a lack of obvious news on the company or any specific research buoying the stock.
Shares closed up 15 cents, or 8.2%, to $1.99, after rising as high as $2.04 in intraday trading. Nearly 326 million shares traded hands on Monday, vs. a three-month daily average of 86.7 million, according to Yahoo Finance.
An E*Trade spokeswoman declined to comment regarding the stock surge.
E*Trade was the most active stock on the
Nasdaq
on Monday, as financial stocks led the way in volume on
New York Stock Exchange
.
Citigroup
(C) - Get Report
was the most actively traded stock on the NYSE, followed by
Bank of America
(BAC) - Get Report
,
Fannie Mae
(FNM)
and
American International Group
(AIG) - Get Report
.
It was unclear exactly what moved E*Trade on Monday. Among message board chatter, some investors questioned whether a buyout of the troubled firm was nearing. Analysts have been increasingly optimistic about a merger with one of E*Trade's rivals,
TD Ameritrade
(AMTD) - Get Report
or
Charles Schwab
(SCHW) - Get Report
.
E*Trade's capital and financial position has been precarious since the credit crisis unfolded. Its banking subsidiary has been slammed by troubled home equity and mortgage loans and from significantly devalued mortgage-backed securities bought earlier in the decade. Regulators told the company this spring to raise capital quickly amid its improved -- yet still struggling -- loan portfolio and low levels of capital in its banking subsidiary, as compared to other financial firms.
This summer the company completed a $1.7 billion debt-for-equity exchange along with raising some $600 million in common equity to bolster its capital levels. But critics flared up once again last week after the company said it was authorizing a $150 million at-the-market stock offering, which suggested that perhaps the company was either worse off or looking to accelerate loan sales, some said.
E*Trade said the move was simply to take advantage of the positive market conditions to build its liquidity.
Still, a merger or takeover is not out of the question. The company has yet to hire a replacement for outgoing CEO Don Layton, who will leave at the end of the year, upon expiration of his employment agreement.
-- Written by Laurie Kulikowski in New York.
