From the Bull Market Report...
4. E*TRADE RAISES $300 MILLION IN VENTURE CAPITAL
E*Trade Group (EGRP, $24, unch) is raising $300 million in a venture
capital fund they add to a portfolio of new companies that has racked up
unrealized gains of $725 million. The move highlights a little-known
weapon in the broker's arsenal to finance losses expected to stretch to
$135 million in accumulated deficits through March 2001. On top of the
profits early-stage investing can generate, E*Trade's venture
investments
also yield new technologies it can apply to its brokerage and a
potential
source of shares in IPO's for clients of its E*Offering unit. Access to
IPO's is a key selling point for E*Trade and its competitors.
COMMENT: Of course they are raising a venture fund! Everyone else is,
and unlike some others, it actually makes sense for E*Trade to do so,
with
their ability to couple it with E*Offering. This makes a lot of sense,
and based on their track record, could easily become an unmitigated
success for them. This company has all the makings of a financial
services titan. You do realize, of course, that they can go profitable
at
the snap of their fingers if they like. They are just spending big
dollars in gathering market share right now, which should put them in
the
driver's seat for years to come. |
