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

To: KM who wrote (10004)	12/20/1999 10:38:00 PM
From: KM	Read Replies (2) \| Respond to of 13953

ETrade, Schwab Spoil an Up Day for the Brokerages By Megan E. Lundin E TRADE GROUP EGRP 28.94 -1.13 -3.76% SCHWAB (CHARLES) CORP SCH 33.13 -3.00 -8.30% ON AN UP DAY for the brokerage group, E Trade (EGRP) and Charles Schwab (SCH) stuck out like a pair of sore thumbs on SmartMoney's Map of the Market today. They fell 3.7% and 8.3%, respectively, presenting what Hambrecht & Quist analyst Gregory Smith thinks is a buying opportunity. Smith attributed the recent weakness in the two stocks to tax-loss selling. Both issues closed on Friday more than 50% off 52-week highs reached in early April. And that means a lot of portfolio managers are sitting on losses. As they clean up their portfolios and plan their year-end tax losses, ETrade and Schwab probably look like good selling candidates. Smith also speculated that short sellers could be putting pressure on ETrade in anticipation of its expected merger with Telebanc Financial Corporation (TBFC). Smith explained that each Telebanc shareholder gets a percentage of a share of ETrade, so investors may be buying Telebanc and shorting ETrade. But Smith thought it was odd to see the stocks dropping after the strong earnings announcement from Morgan Stanley Dean Witter (MWD) in the brokerage sector. "Trading volume is on fire and we are headed into a seasonably strong first-quarter period, account growth is strong, and Y2K fears have abated," says Smith. "The picture is getting rosier and rosier, but the stocks are getting weaker and weaker, so it is a buying opportunity in my mind." Tim Butler, an analyst at Pacific Crest Securities, agreed that the fundamentals are very strong for the fourth quarter. He now expects a rally in conjunction with the typically strong January effect and strong fourth-quarter earnings announcements. Schwab today announced that it had formed a 50-50 joint venture with Australia's Ecorp Ltd. to provide financial services to Australians. Under the agreement, Schwab will acquire a 50% stake in Online Broker Holdings Ltd., an Ecorp subsidiary that offers non-advisory stockbroking to Australian investors. The joint venture will conduct business under the name ShareTrade Australian Stockbroking, which will eventually be renamed Charles Schwab Australia. The deal is expected to close in the first quarter of 2000, subject to regulatory approval. And in a side note, a couple of ETrade insiders joined the millionaires' club last month. Judy Balint, an officer at ETrade, exercised options worth over $1 million, and President Kathy Levinson exercised options worth $2.4 million. Those were small change compared to Chairman of the Board Christos Cotsakos, who added $9.4 million to his piggy bank last month.