It's Time for E*Trade
It is well known that NASDAQ had the record trading volumes in November. Account growth has been excellent. However, OLB leader E*Trade share prices remain in trading range. Wall Street big boys have set ridiculously low revenue/earnings estimate for EGRP, NITE. BancBoston Robertson Stephens Scott Appleby is a lonely bull for EGRP/NITE. One can even argue or suspect that Wall Street big boys deliberately try to contain Rule Breakers such as E*Trade and Knight/Trimark. But truth will come out sooner or later.
Next week, OLB Schwab is going to report November trading activity. To avoid be embrassed by Schwab's report, today E*Trade Group Inc. and Ameritrade Holding Corp. quarterly revenue estimates were raised by analysts at Lehman Brothers, Salomon Smith Barney and BancBoston Robertson Stephens, who cited strong customer trading volumes.
At BancBoston Robertson Stephens, analyst Scott Appleby reduced his estimated quarterly loss for E*Trade to 13 cents a share from 17 cents, and for Ameritrade to 20 cents from 21 cents. The Nasdaq Stock Market has reported nine of its 10 biggest volume figures since Nov. 1, and E*Trade and Ameritrade are having similar success, he said.
Appleby now estimates E*Trade will report revenue of $208 million in the quarter, while Ameritrade will report revenue of $94 million.
E*Trade, the second-largest Internet broker, had revenue of $173.2 million in the September quarter, and $88.1 million in the quarter ended Dec. 31, 1998. No. 6 Ameritrade had revenue of $74.5 million in the September quarter, and $52.1 million in the quarter ended Dec. 31, 1998.
Scott Appleby cannot believe that EGRP (AMTD, SCH) stocks are so cheap right here. E*Trade at 31 or so is a third of what the broker's shares stood at in April. And so on.
Online investors and Nasdaq have long been linked. Nasdaq claims the lion's share of technology stocks in the U.S. stock market. This year, in fact, Nasdaq claims to have captured more than half of all dollar volume on the major U.S. stock markets. See related link. Individual investors are placing bigger and bigger bets on individual stocks, driving trading volumes higher and higher. I can't find any analyst on record as saying that a 2 billion-share Nasdaq day was remotely possible in 1999.
Appleby sees 9 million online accounts of a total 70 million brokerage accounts in the United States. He expects the number of online accounts to grow to as many as 25 million by the year 2003. Individuals who use their own computers to conduct trades are said to account for about a quarter of all Nasdaq trades these days.
"We happen to believe that we are in the early stages of this thing," Appleby says about the tech stock mania that is sweeping not just the United States, but exchanges in London, Hong Kong and Tokyo.
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