E*Trade (NYSE:ET) Message Board

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Non-Tech : E*Trade (NYSE:ET)

ET 16.51

-0.3%

2:20 PM EST

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To: ecommerceman who wrote (11229)	1/31/2000 5:15:00 PM
From: Alper H.YUKSEL	Read Replies (1) of 13953

The convertibles have the potential to dilute the stock. But it's current effect on the stock price should be negligible. I don't know yet the details of the convertible but, firstly in order to be converted, the stock price must appreciate to make it worth exercising the option to convert. Secondly, even if $ 500 million would be converted to equity TODAY, it would mean a dilution of 2 1/4 points. Well, we've fallen by 8 full points since the earnings announcement, and the conversion is still years away as far as I know. While SCH has been behaving better (marginally, of course) the whole OLB sector is in doldrums. The past few days' market is also not helping, but we had a nice rebound today and the OLBs were left out again. So what's going on ? I don't pretend to know the reasons for the extended decline. (Valuation concerns ? It's hard to believe that sane valuation practices have gained foothold in this particular segment.) Whatever the reasons are, we should have approached the bottom by now. The group is fully out of favor, everybody's bearish and shares have been blown out for some time now. The fundamentals are OK in terms of growth. Maybe the online trading expo in 3 weeks will be a catalyst for sector rotation into OLBs. onlinetradingexpo.com Here's to hoping.

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