Tuesday January 19, 11:59 am Eastern Time
E*OFFERING receives many calls about IPO offerings
NEWPORT BEACH, Calif., Jan 19 (Reuters) - Online investment bank E*OFFERING, in part owned by E*TRADE Group Inc. (Nasdaq:EGRP - news), said Tuesday it has started a customer service because of the large number of questions about its initial public offering services.
In an attempt to move Internet brokers further into stock offerings, one of the securities industry's most guarded businesses, E*OFFERING said it will reduce the corporate fees traditionally associated with the underwriting process to less than 7 percent and it plans to provide greater access to subscribed public offerings.
The company started operations on Jan. 12, 1999.
''After just one week, we've had tremendous response to the news announcing the formation of E*OFFERING,'' said Walter Cruttenden III, president of E*OFFERING.
He added, ''Companies clearly are attracted to E*OFFERING's new e-commerce business model and the access it intends to provide to individual investors via our alliance with E*TRADE.''
E*OFFERINGS intends to distribute up to 50 percent of every stock offering to online retail investors, with E*TRADE customers being generally given first access to these shares. The remaining portion of the offering will be distributed to institutions through the company's planned institutional sales group.
E*OFFERING was founded by Walter Cruttenden III, former chief executive officer and president of Cruttenden Roth Inc., Sandy Robertson, founder and former chief executive officer of Robertson Stephens & Co., and E*TRADE Group, 28 percent owner of the online investment bank.
E*TRADE's investment announcement pushed the stock to a record high of $106.50 last week.
E*TRADE participated in 25 IPOs in 1998 and aims to increase that business by focusing on small company stock offerings of $25 million to $50 million.
Its shares were up 2-1/8 at 88-1/8 on Tuesday.
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