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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: buckhead26 who wrote (9967)	12/18/1999 2:42:00 PM
From: desert fox	Read Replies (3) \| Respond to of 13953

The October-December quarter: Without question, ETrade's revenue will definitely be higher than last quarter; however, the question remains regarding how much. The other question is whether they will report a smaller than expected loss. I don't think anyone outside of the ETrade organization knows the real answer to that second question. Consider this: 1) This quarter, ETrade started the rebate program for active traders. What did this accomplish: - less revenue as the active traders will start getting kickbacks.(e.g. I usually trade about 25-30 times a quarter. The July quarter, I traded 35 times. This quarter I am already at 45 and rising. I didn't increase my trading habits because of the rebate although it will result in my paying less commissions. I increased it because I have become more active as a result of market conditions) - What this is doing is to attract more active traders to ETrade. It is an account acquisition strategy and not designed to increase someone's trading habits just because it is cheaper to do so. --> Will this increase from account acquisitions from active traders + general increase in trading activity offset the drop in revenue from rebates to existing customers? I don't know since I don't know how many Platinum ETraders there are. Perhaps someone should ask that question next time they have a shareholder meeting? 2) I don't think anyone will argue that ETrade has kicked their advertising into overdrive this quarter. They spent 83? million last quarter and I barely saw any commercials on TV. These days, I am constantly seeing their commercials at night sometimes every time there is a commercial break with whatever program I am watching. They have also increased their amount to start an account sometimes as high as $150 and of course the $400 for the MYCOMPUTER rebate. Now, will ETrade increase their ad spending solely to increase brand awareness or are they picking up a significantly higher number of accounts this quarter. If brand awareness, we will see the same type of losses and we won't see the effect until a quarter later regarding brand awareness that is. If it's because of customer acquisitions, then great we will have more accounts; however, we will still not see significant revenue from them until at least a quarter later if at all. For myself, I just hope ETrade does not decide to increase their dollars paid/acquisition. I think last quarter they dropped it down to $198/account. If it goes up this quarter(it could if they are focusing on brand awareness), it will go up. In both cases, if they stay with their stated goals, their losses should stay constant and anyone saying they will report a smaller loss is dreaming. They have already stated in the past that their advertising will increase depending on market conditions(volume!!!) 3) ETrade is increasing their international operations significantly. --> Long term strategy is great but increased losses from starting these things up. The trading revenue they get from these operations is insignificant right now and spending is increasing. Conclusion: I thing losses will beat estimates by a few pennies and nothing more. If ETrade reports a profit, then they are straying from their strategy. Short term good. Long term bad. Super long on E*Trade, df