Jim Cramer: E*Trade Put Up a White Flag

Publish date:
Video Duration:

Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report is acquiring E*Trade  (ETFC) - Get E*TRADE Financial Corporation Report for $13 billion.

It’s the largest acquisition for the bank since the financial crisis.

And it’s just the latest consolidation for the retail brokerage industry.

Morgan Stanley will reportedly pay around $58 per share for E*Trade.

E*Trade has 5.2 million client accounts and around $360 billion of retail client assets. Morgan Stanley has 3 million client accounts and $2.7 trillion of client assets, according to the release.

The deal is expected to close in the fourth quarter of 2020.

In the past year, Morgan Stanley is up 34%. E*Trade is down nearly 7%.

So, what does this acquisition mean for the big bank? 

"Analysts will be diving into the books of E*Trade and some may be looking to see if a higher bid may come from someone else. Who knows? What I suspect is that the stock price of MS will likely trade in a relatively tight range. To me, the big risk will be the broad market. A serious decline in the broad market in H1 could hit MS and ETFC," noted Real Money contributor Bruce Kamich. 

Over on TheStreet Live, Cramer talked about how E*Trade put out the white flag. 

Watch the full video for more.

Catch up on the Latest Videos on TheStreet!

Related Videos