I for one do not think ETrade will drop in rank among the OLBs if the Telebank merger falls through. ETrade has way too much going for it, record volumes being just one facet today. The connection with Softbank, the global network they are growing for international trading, the international sites, egads the list goes on and on. ETrade management will never let a failed merger stop them from pursuing their vision, at least from past performance I think it is safe to conclude they wouldn't, and that means progress. This whole merger thing has gotten so snarled that at this point it might be best to turn the page and chalk it up as a learning experience. Earnings will be great, account acquisition will be great, the Superbowl ad will do wonders (the purchase of which is a bullish signal on current revenues, imo).
Last quarter Yahoo had revenues of 155.1 million, with income of 40.4 million. ETrade had revenues of 173.2 million with a loss of 24.7 million. Yahoo has a cap of 60 Billion today, so what will happen when ETrade starts turning profits? If they maintain a steady ad budget, but keep increasing accounts, then revs will climb. Also, last quarter 18% of revenues were from international sites, a market just unfolding, and that was prior to adding Japan and Germany. Now they own two of their international sites. More revenue! They will also, as we have seen, reduce the ad budget during low seasons. These folks are smart, and on track. Ameritrade, on the other hand, for all we know, might actually start delaring losses because of increased ad spending. Who knows?
ETrade doesn't need Telebank just yet, as they currently have so much going for them. However, if the merger goes through I'm sure it will be a good thing also.
The big problem is that the delay affects investor perception. This has stalled our share price. But the company is clearing moving forward. When the market catches up...well, you don't need to be a rocket scientist these days to ride a rocket! |
