This article contains content that is written like an advertisement. (February 2022)
Palo Alto, California, U.S.
|Founders||William A. Porter|
Bernard A. Newcomb
|Headquarters||Arlington, Virginia, U.S.|
|Rodger Lawson, Chairman|
Mike Pizzi, CEO
Electronic trading platform
E-Trade Financial Corporation (stylized as E*TRADE) is a financial services company, which offers an electronic trading platform to trade financial assets. The company receives revenue from interest income on margin balances, commissions for order execution, payment for order flow, and management services. The company has 30 branches.
In 1982, William A. Porter and Bernard A. Newcomb founded TradePlus in Palo Alto, California, with $15,000 in capital. In 1991, Porter and Newcomb founded E-Trade Securities, Inc., with several hundred thousand dollars of startup capital from TradePlus. E-Trade offered its trading services via America Online and Compuserve. In 1994, its revenues neared $11 million, up from $850,000 in 1992.
By June 30, 1996, the company had 73,000 accounts and processed 8,000 trades per day, with quarterly revenue of $15 million.
In January 2004, Toronto-Dominion Bank held talks to merge its TD Waterhouse discount brokerage with E-Trade, but the two sides could not come to an agreement over control of the merged entity. TD Waterhouse instead merged with Ameritrade to form TD Ameritrade. After the merger, E-Trade continued talks to merge with TD Ameritrade but the two sides could not agree on price and governance rights.
In August 2005, the company acquired Harrisdirect (known under previous owners as DLJdirect and CSFBdirect) from Bank of Montreal. Two months later, E-Trade acquired Brown & Company (aka BrownCo) from JPMorgan Chase for $1.6 billion in cash. As a result, E-Trade closed its office in Rancho Cordova, California, on August 31, 2006 and terminated 500 employees.
On November 29, 2007, E-Trade announced a transaction in which Citadel LLC invested $2.5 billion in cash in exchange for the company's securitized subprime mortgages, collateralized debt obligations (CDOs) and second lien loans, as well as 12.5% senior unsecured notes, and 84,687,686 shares of common stock (equal to 19.99% of the then currently outstanding shares). This resulted in a net $2.2 billion reduction in assets on the company's balance sheet. Citadel received a seat on the board of directors of the company and Mitch Caplan resigned as CEO.
In November 2007, the company revoked the brand name license from SBI E-Trade Securities in Japan.
In March 2008, E-Trade named Donald Layton, formerly JPMorgan Chase vice chairman, as its new CEO. Layton had joined E-Trade's board of directors in November 2007, at the same time as the Citadel LLC deal.
On March 22, 2010, Steven Freiberg was named CEO. Freiberg was the former co-CEO of Citigroup's global consumer group and former head of its credit card unit.
On September 12, 2016, E-Trade acquired OptionsHouse for $725 million and later that month Karl A. Roessner, E-Trade's general counsel since 2009, was appointed CEO.
On October 19, 2017, E*TRADE acquired RIA custodial services company Trust Company of America.
On August 14, 2019, Michael Pizzi was appointed CEO.
"E-Trade Baby" advertising campaign (2008-2014, 2022-present)
E-Trade Baby was an integrated advertising campaign that featured a baby that talked about finance. The goal was to make the audience believe that E-Trade was easy to use. The campaign, which appeared online, on television, and in print, was created by Tor Myhren, then of Grey Global Group. At first, Myhren had doubts if the ad campaign would work.
In February 2009, during Super Bowl XLIII, the company once again aired a 30-second advertisement featuring the baby, along with a Facebook page, updates on Twitter, and videos on YouTube. As a result of the advertisement, the company realized a 19% increase in online applications and an 86% increase in website traffic in the week after the game.
In January 2013, the company aired an advertisement during Super Bowl XLVII featuring the baby. In the advertisement, the baby focuses on how much money is at stake in 401(k) account fees and offers a better approach: "come to E-Trade, and Save It".
On February 13, 2022, the baby made a return during a commercial which aired during Super Bowl LVI.
- Ajaxo Inc. v. E*Trade Financial Corp.
- Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, a 2016 Supreme Court case involving naked short-selling claims against E*TRADE and Merrill Lynch, and others, resolved in defendants' favor.
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- Orlofsky, Steve (December 9, 2019). "E*Trade buys student loan provider Gradifi for $30 million". Reuters.
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- Vega, Tanzina (December 28, 2011). "E*Trade's Baby Creates the Most Online Buzz". The New York Times.
- "E*TRADE Unveils Super Bowl XLVII Advertisement" (Press release). E-Trade Financial. February 1, 2013.
- "E-Trade bids goodbye to its iconic baby". CNBC. Reuters. March 21, 2014.