Does anyone know how much of E-Loan Softbank owns? -- Or did own...
Stock doubled on this news today:
Schwab, VCs take stakes in E-Loan
By Emily Church, CBS MarketWatch
Last Update: 2:17 PM ET Apr 25, 2000
NewsWatch
NEW YORK (CBS.MW) -- Shares of online mortgage provider E-Loan
soared 80 percent Tuesday after Charles Schwab and a handful of
venture capital funds announced investments totaling $40 million in
exchange for stakes in the company.
Shares (EELN: news, msgs) rose 3 1/4 to 7 5/16
on the news. Along with Schwab (SCH: news,
msgs), venture firms Abbey National, FT Ventures,
Benchmark Capital and Technology Partners are
investing in E-Loan.
Four-year Schwab pact
E-Loan also announced a four-year pact with
Schwab that E-Loan executives say sets up
exclusivity for E-Loan's mortgage loan products on
the Web for Schwab's 3.3 million online brokerage
customers.
E-Loan bested nine other online mortgage loan
product providers for the Schwab spot after a
"grueling due diligence" process that lasted about a
year, E-Loan Chief Executive Chris Larsen told
CBS.MarketWatch.com.
As part of the exclusive agreement, E-Loan can
distribute its mortgage products on other sites, except one -- which
E-Loan declined to name.
Without detailing any estimates for loan originations from the Schwab
venture, Larsen said that "we certainly have high expectations with the 3.3
million online customers."
Future plans call for further cooperation on loan products.
For now, between 75-80 percent of loans stem from the eloan.com site,
with the rest coming from distribution partners. About 50 percent of the
auto loans stem from online partnerships, chief financial officer Frank
Siskowski said.
The stake takers
Schwab, Abbey National and FT Ventures are each investing $10 million
in E-Loan. At $3.75 a share, each will receive 2.7 million shares. After
their investments, each will hold a 5 percent stake in E-Loan.
E-Loan is expected to further grant Schwab 13.1 million warrants as part
of their agreement.
Benchmark Capital and Technology Partners, already existing investors in
E-Loan, are investing an additional $5 million each to increase their stakes
by 2.5 percent. The investment will bring the stake of Benchmark,
E-Loan's single largest shareholder, to 19.7 percent and Technology
Partners' stake to 11.5 percent.
The infusion of funds will "be used for working capital and general
corporate purposes." See statement.
Despite Tuesday's pop, E-Loan's stock is still well off its 52-week high of
74 3/8. Its sharp decline came alongside its peers in the online loan space.
Emily Church is the New York bureau chief for CBS MarketWatch.
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