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To: agent99 who wrote (586)	1/21/1999 10:18:00 PM
From: TFF	Respond to of 2802

DLJ may spin off part of online brokerage By Bloomberg News Special to CNET News.com January 21, 1999, 11:40 a.m. PT Donaldson, Lufkin & Jenrette said it will decide this quarter whether to sell part of its online broker to investors, adding another public company to the fastest-growing part of the securities industry. The comment by the chief executive of the eighth-largest U.S. securities firm helped boost its stock almost 10 percent from its low after the company said fourth-quarter earnings fell 32 percent. In late trading, DLJ was down 4.25 at 48. It had fallen as low as 46.9375 and risen as high as 51.5625. Trading activity at online brokers surged more than 30 percent in the fourth quarter as investors bought stocks in Internet companies. Profit from the business helped fourth- quarter earnings at Charles Schwab the biggest online brokerage, jump 69 percent. Spinning off the online unit, DLJ Direct, "is something we are looking into,'' CEO Joe Roby said in an interview. "We are aware of the market value of some of DLJ Direct's competitors.'' Investors have sent stocks of online brokers soaring as the number of trades they execute daily swelled. E*Trade the second-biggest online broker, rose 524 percent in the last three months. Ameritrade, the sixth-largest, is up 233 percent. "Anyone with a viable online brokerage business should at a minimum be asking the question if they should be spinning it out,'' said Scott Sipprelle, co-founder of Midtown Research Group and former head of equity underwriting at Morgan Stanley, Dean Witter & Co. DLJ's online brokerage service was the seventh-largest in terms of daily trades in the third quarter. The unit earned record revenue of $117.9 million in 1998, up 61 percent from the prior year, the company said. Client assets doubled to $8.9 billion and the average number of trades per day rose 87 percent to 11,400. In the first week of 1999, average trades rose to 21,000. That was one of the brightest spots in today's earnings report. Fourth-quarter profit fell to $68.7 million from $101.4 million in the last three months of 1997 as trading revenue plunged after markets plummeted late in the third quarter. Per- share earnings fell 39 percent to 47 cents from 77 cents. The results matched the average of 47 cents a share expected by analysts surveyed by First Call. That drove down DLJ's stock after rivals Merrill Lynch, Bear Stearns, and Paine Webber earlier this week beat estimates. "The weakness was where you would expected it to be'' for DLJ, said Richard Strauss, a securities industry analyst at Goldman Sachs & Co. "But the overall result of meeting expectations when everyone else has beaten them handily'' weighed on the stock. Trading revenue fell 78 percent to $6.92 million as a global market decline in September and early October, triggered by Russia's default and currency devaluation in August, hurt trading revenue industrywide. "The trading numbers here are indicative of the market decline, most of which occurred in October,'' said Roby. 'We should be making a lot more money trading securities'' than in the second part of last year.