DBCC:In Perspective. "Internet Trades Hit Record Amid Snags And Worries"
NEW YORK (Reuters) - "...Investors funneled a record number of trades through the Internet in the fourth quarter...Frenetic trading in Internet stocks helped cyberspace brokerages average a record 340,000 trades per day in the quarter, up 34 percent from the third quarter, according to a recent report by analyst Bill Burnham of Credit Suisse First Boston. Trades via the Web now make up 13.7 percent of all stock trades, up from 9.2 percent a year ago....AmeriTrade Holding Corp. (Nasdaq:AMTD - news), the No. 6 Internet brokerage, has been plagued by system failures. The firm spent $2 million to upgrade its technology and took a $3.1 million charge to refund customers for delays when its systems were down or slow in the last quarter.
''The level of activity and the type of trade numbers we're doing now is what we had expected to do next August,'' said the firm's chief executive, Joe Ricketts, in a recent interview...The rise in Internet trading prompted the chairman of the U.S. Securities and Exchange Commission, Arthur Levitt, earlier this week to warn cyberspace investors that they can end up paying more for a stock they thought because of system delays and Internet stocks' wild price swings...Small investors, however, have kept pouring money into the sector, pushing stocks to new highs. The craze has even spurred a rally in shares of the brokers they funnel their trades through.
E+Trade Group Inc., the No. 3 Internet brokerage that pioneered trading over the Web, has seen its stock price soar 11-fold in the last four months to a record high of $112.50 Friday. Charles Schwab Corp. (NYSE:SCH - news), the No 1 Internet brokerage, now has a market value of $29 billion, just $2 billion shy of the market capitalization of the nation's largest securities firm, Merrill Lynch and Co. Inc.'s .
''The clear source of all this growth was the very active trading in Internet stocks,'' said CS First Boston's Burnham. Trading volumes in the stocks, which largely are listed on the Nasdaq electronic stock market, rose 47 percent in the quarter, while the New York Stock Exchange reported a tiny 1.5 percent increase, he added.
But the worst may be yet to come. Some 7.8 million people now have online accounts, but another 16 million are surfing the Web looking for financial information, Stein said..."
source: © 01/31/99 (Reuters)
dailynews.yahoo.com
"...Charles Schwab (SCH) share of the Internet stock trading market slipped in the fourth quarter, as rivals grew even faster, according to a research report by CS First Boston.
Schwab, the nation's largest Internet brokerage with 2.2 million on-line accounts, saw its share of the on-line market slip by 3 percentage points to 27.4 percent. Schwab averaged 93,000 trades a day in the quarter, up 21 percent over 76,500 in the third quarter.
Waterhouse Securities, the on-line subsidiary of Canada's Toronto-Dominion Bank (TD.TO), moved into second place with a 12.4 market percent share, up from 10.5 percent in the third quarter. Helped by its recent acquisition of discount broker Jack White & Co., Waterhouse reported a 59 percent increase in trades to 42,000 a day, up from 26,500 in the third quarter.
E*Trade Group (EGRP), one of the original firms in this business, increased its market share 1 percentage points to 12 percent, but fell to third place from second in the third quarter. The brokerage posted an average of 40,000 trades a day, up 46 percent.
Privately-held Datek was the fastest-growing firm with a 60 percent jump in average daily volumes to 34,000 a day. The brokerage moved up one notch in the ranking, replacing Fidelity as the No. 4 Internet brokerage with a 10 percent market share.
In all, Internet trades grew 34 percent to 340,000 a day in the quarter. One in seven stock trades now takes place in cyberspace, according to the report.
COMMENT: What can we say? We are long E-Trade and Charles Schwab (SCH) to take advantage of this trend..."
source: ©
THE BULL MARKET REPORT for the WEEKEND, January 30-31, 1999 Volume 13, #17
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