shares surged 25% after
reported that the troubled online brokerage firm is talking with at least two competitors in hopes of selling itself.
, E*Trade is discussing a possible deal with
, along with several other interested parties.
Speculation about such a deal, rumored since earlier this year, heated up again after the company almost two weeks ago said it would take further writedowns. If E*Trade were to seal the deal with TD Ameritrade, its parent company
could buy the retail banking and mortgage assets, while the Omaha-based brokerage would likely pick up E*Trade's brokerage assets,
E*Trade, which provides online banking, brokerage and lending to retail and institutional customers, joined the likes of
and other smaller lenders hit hard by the housing downturn and mortgage deterioration, particularly as the secondary market for mortgages ground to a halt.
Two weeks ago, E*Trade said it will take further writedowns on its collateralized debt obligations, or CDOs, and second-lien securities portfolio.
E*Trade and TD Ameritrade spokeswomen both declined to comment.
TD Ameritrade-E*Trade Combo No Sure Thing
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The company is also facing a
Securities and Exchange Commission
investigation into its loan and securities portfolios.
Shares have lost more than 80% of their value this year -- a large chunk of which came two weeks ago after a Citigroup analyst suggested
there could be a run on the company's bank.
Other observers have suggested that the firm may need to sell certain assets -- or the entire company -- to recover from the losses.
Market chatter earlier this year had TD Ameritrade and E*Trade discussing a possible merger. TD Ameritrade has been pressured by two big activist hedge funds to merge with an industry peer, namely E*Trade or Schwab.
Shares were recently up 18.3% to $5.04.