Interesting article, I agree, but I think he overstates the negative case, particularly as it affects E*Trade. First, the poll that he cites in the artice about brand awareness (you have to click on a URL to see the full article) is not only counter-intuitive, it's counter to another poll that E*Trade did that showed them with roughly double the brand awareness that Schwab has and roughly 4 times the brand awareness of AMTD. I work in politics and know that polls can be manipulated, but I DON'T believe that 2000 internet users couldn't name a single OLB!
Secondly, E*Trade's new customer acquisition costs are either going lower or at least staying the same, depending on how you judge the figures. I agree that OLBs whose new customer acquisition costs are rising sharply may well be in serious trouble, but that isn't true for E*Trade (which is the only OLB I care about...).
We probably will see some OLB consolidation, I don't deny that, but the chances of E*Trade getting bought out are nil, in my view, despite many rumors to the contrary (unless E*Trade gets in serious trouble, anyway, which we're not). Cotsakos "reason for being," I believe, is to direct E*Trade into the 21st century as the most kick-ass OLB in existence. Like Spytrader, I'm a true believer, and I plan to hold this stock for many, many years in the future... |
