Monday April 24 11:10 PM ET
E+Trade Sees 2000 Revenues Over $1 Billion
By David Brunnstrom
HANOI (Reuters) - U.S. online broker E+Trade Group Inc, expects revenues of well over $1 billion this year, Chief Executive Officer Christos Cotsakos told Reuters.
``...as for E+Trade in particular: it's a blue chip franchise, it's got an established business model, it has plenty of cash, it'll do well over a billion dollars in revenue this year, we are back toward profitability -- so the company has a great future,'' Cotsakos said on Monday.
Cotsakos, in Vietnam as part of an advisory delegation of war veterans turned business leaders, declined to comment when asked if he thought volatility in hi-tech stocks would continue.
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``One of the things I've learned is not to comment on the market in and of itself,'' he said.
E+Trade, the number two U.S. Internet brokerage that lost $54.4 million in 1999, reported a small quarterly profit earlier this month, and said there was much more to come.
It cited large numbers of new customers and a plan to cut advertising growth costing tens of millions of dollars a month.
E+Trade had 2.6 million customers at the end of March -- 2.44 million brokerage accounts and 170,000, bank accounts.
Investor reaction has been lukewarm, however, given jitters over technology stocks, the favorites of online traders, coupled with fears of a return to a bear market.
Consumers usually cut their stock trading in a bear market, drying up the commission dollars on which brokerages depend.
E+Trade shares closed at around $20 on Monday, off a year high of $63.00.
During the quarter to March, E+Trade, second only to Charles Schwab Corp. among U.S. Web brokers, processed 229,000 of the more than one million stock trades investors daily funneled through the Internet.
Commissions Not Vital
But Cotsakos said E+Trade was now much less dependent on commission income than before.
``Actually, less than 46 percent of our revenue now comes from transactions, when three years ago it was well over 90 percent.''
Asked about market volatility, Cotsakos said: ``Volatility is OK but it's not the only thing that keeps people investing. It's part of the equation but not a major part of the equation.''
Cotsakos said E+Trade was looking to expand to Vietnam, which plans to open a pilot stock market later this year.
``We think it's a great place to get a foothold and establish our electronic trading platform, which will have cross-cultural as well as cross-trade in currencies,'' he said.
Cotsakos said Asia's recent financial crisis may have delayed Vietnam's plans for the exchange.
The lack of a properly equipped trading floor and a dearth of suitable firms for listing also mean a full-fledged market is still some years away.
E+Trade is now available in nine countries outside the United States, and plans to add services in Germany, Hong Kong, Norway and Israel in the next six months, officials have said.
Asked if any agreement had been reached with Vietnam, Cotsakos replied: ``We don't have an agreement yet. But you know how it works in emerging countries -- we'll be talking.
``We will be in 30 markets worldwide and this will be one of them.''
Vietnam has so far issued stock brokerage permits to four companies, all of them local. |
