E*TRADE will be a $2 stock in 1 year.
It's about tied with CompuServe as my biggest short position. I'll tell you why. First of all, I don't buy that the big traditional brokerages are going to take over Internet trading. It could very well be little new companies.
However, E*TRADE is not going to be a player in either scenario. a notorious reputation for bad customer service and slow executions coupled with commissions that could be better ($14.95/$19.95 vs. e Broker $12, Datek $9.95, etc.), I think that they will fail sooner rather than later.
I shorted it at $9 1/8 yesterday, seemed to bounce off it pretty well though. I may short more today if it can hit $10 1/2 or perhaps $10 1/4. The market short-term may think it's a good idea to invest in an electronic brokerage company, but in the intermediate term they will realize that E*TRADE isn't the specific one to be bullish on, and the stock will plummet. There is new competition for Internet trading every day, and E*TRADE is going to suffer a serious decline in rev.
They are already slowing down considerably. $15.6M to $17.1M from qtr. ending 6/30 to one 9/30. That's not good at all if you compare to other electronic brokerages.
Ask Datek or e Broker (even Schwab, Fidelity!) how much their revenues increased!
Does anyone actually think this company is worth $200M?! Oh excuse me. I stand corrected. It is worth $306M at $10 a share!!!!!
(This is from the E*TRADE Forum from me, I copy-and-pasted again...) |
