E-Trade

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This article is about the financial company. For the method of trading, see electronic trading. For East Trade Street in Charlotte, see Trade Street.
E-Trade Financial Corporation
Public company
Traded as NASDAQETFC
S&P 500 Component
Industry Financial Services
Founded Palo Alto, California (1982)
Headquarters Time-Life Building, New York City, United States
Key people
Paul T. Idzik, CEO
Michael Pizzi, CFO
Brent B. Simonich, Controller[1]
Services brokerage firm
Revenue Decrease US$1.428 billion (2015)[1]
Decrease US$268 million (2015)[1]
Total assets Increase US$47.94 billion (2016)[2]
Total equity Increase US$5.799 billion (2015)[1]
Number of employees
3,421 (2015)[1]
Website www.etrade.com

E-Trade Financial Corporation (stylized E*TRADE) is a financial services company headquartered in New York City, United States. It is an online discount stock brokerage firm for self-directed investors. Investors can buy and sell such securities as stocks, bonds, options, mutual funds, and exchange-traded funds via electronic trading platforms or by phone. E-Trade Financial also provides banking services to retail investors, such as sweep deposits and savings products.

E-Trade Financial operates directly and through numerous subsidiaries. The most significant of its subsidiaries are E-Trade Bank, E-Trade Securities LLC, and E-Trade Clearing LLC.

Current operations[edit]

As of December 31, 2015, the company had 3,213,541 brokerage accounts and a total margin receivables balance of $7.4 billion.[1]

In 2015, the company processed 155,470 daily average revenue trades.[1]

In 2015, 76% of net revenue was from interest income and 24% of net revenue was from fees and commissions.[1]

The company has 30 branches.[1]

The company's primary offices are in Alpharetta, Georgia; Jersey City, New Jersey; Arlington, Virginia; Sandy, Utah; Menlo Park, California; and New York, New York.

History[edit]

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 a new company, 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.[3]

By June 30, 1996, the company had 73,000 customers and processed 8,000 trades per day, with quarterly revenue of $15 million.[4]

In August 1996, the company executed an initial public offering.[5]

In 2001, the company acquired Web Street Securities, a publicly traded online brokerage firm, for $45 million in stock. Web Street had offices in Beverly Hills, Boston, Denver, and San Francisco.[6]

In 2003, 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.[7] TD Waterhouse wound up merging with Ameritrade to form TD Ameritrade.[8] After the merger, E*Trade continued talks to merge with TD Ameritrade but the two sides could not agree on price and governance rights.[9]

In August 2005, E*Trade Financial acquired Harrisdirect, formerly a discount brokerage service of Bank of Montreal. Two months later, E*Trade acquired Brown & Company (aka BrownCo), formerly a discount brokerage service of JPMorgan Chase & Co., for $1.6 billion in cash.[10]

Subprime portfolio divestiture in 2007[edit]

E*Trade Financial Center, San Francisco

In July 2007, Etrade Australia, which was a separately operated company owned 6% by E*Trade Financial, was purchased by Australian ANZ Bank for $432 million.[11]

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, 12.5% senior unsecured notes, and 84,687,686 shares of common stock (equal to 19.99% of the then currently outstanding shares). The transaction removed the assets with the greatest market risk from E-Trade's consolidated balance sheet—the $3 billion asset-backed securities (ABS) portfolio, including its ABS collateralized debt obligations (CDOs) and second lien securities. This resulted in a net $2.2 billion reduction in assets on the company's balance sheet. Citadel received a seat on E-Trade Financial's Board of Directors and Mitch Caplan resigned as E-Trade's CEO. Although E-Trade's management admitted that the deal was costly for the company, it removed the risk associated with the subprime investments and resulted in an infusion of $2.5 billion in cash.[12]

Post subprime reorganization[edit]

In November 2007, E*Trade revoked the brand name license from SBI E*Trade Securities in Japan.[13]

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 deal.[14]

In July 2008, E*Trade sold its Canadian division to Scotiabank for CAD$444 million, as part of a program to stabilize the company.[15]

In December 2009, Robert Druskin, a former chief operating officer of Citigroup Inc. was named interim CEO and chairman.[16]

On March 22, 2010, Steven Freiberg, former co-CEO of Citigroup's global consumer group and former head of the bank's credit card unit, was named as E*Trade's new CEO while Druskin continued in his role as board chairman. The company also announced it would seek shareholder approval for a 1-for-10 reverse stock split.[17]

On January 17, 2013, Paul T. Idzik was appointed CEO. Idzik had previously been Group Chief Executive of DTZ and also served ten years at Barclays bank.[18]

Awards[edit]

The company has received various awards, which are listed on its website.[19]

Advertising[edit]

"E*Trade Baby" Advertising Campaign[edit]

E*Trade Baby was an integrated advertising campaign that appeared in online, television, print, and social media.

The first E*Trade baby was Gregory Michael Miller, taken in March 2001.[20]

In January 2008, E*Trade debuted advertisements during the Super Bowl featuring a talking baby in front of a web cam discussing investing and finance in an adult voice.

The "insufferable brat" returned the following year for Super Bowl XLVII, along with a Facebook page, updates on Twitter, and videos on YouTube.[21] It is a 30-second "Talking Baby" advertisement. The E*Trade Baby demonstrates a "Save It" initiative that focuses on just how much money is at stake in hidden 401(k) account fees and offers a better approach: "come to E*TRADE, and Save It".[22]

The E*Trade baby was voiced by comedian Pete Holmes.

The campaign was created by Tor Myhren, then of Grey Global Group.[23]

In 2013, the company had over 64 million total views and over 26,000 subscribers on YouTube, more than 108,000 Facebook Baby and Corporate pages fans, and more than 17,000 Twitter followers.[24]

On March 21, 2014, the company announced the end of the E*Trade baby via, a commercial which aired during March Madness.[25]

See also[edit]

References[edit]

  1. ^ a b c d e f g h i E-Trade Financial Corporation 2015 Form 10-K Annual Report
  2. ^ http://www.forbes.com/global2000/list/8/#header:assets_sortreverse:true_search:E-Trade
  3. ^ E*Trade Financial Corporation History
  4. ^ E*Trade Prospectus - Initial Public Offering
  5. ^ E*Trade: Frequently Asked Questions
  6. ^ "E*TRADE Acquires Web Street for $45 Million in Stock". PRNewswire. May 21, 2001. 
  7. ^ Valdmanis, Thor (January 14, 2004). "TD Waterhouse, E-Trade talk merger". USA Today. Retrieved May 1, 2010. 
  8. ^ Austen, Ian (June 23, 2005). "TD Waterhouse USA Is Sold to Ameritrade". New York Times. 
  9. ^ Goldstein, Steve (August 22, 2007). "E-Trade and TD Ameritrade have discussed merger". Marketwatch. 
  10. ^ E-Trade to acquire BrownCo for $1.6B. San Francisco Business Times. September 30, 2005. Accessed September 12, 2007.
  11. ^ "ANZ's Etrade unit has 'no links' to US firm". The Australian. November 14, 2007. 
  12. ^ "E*TRADE Financial Announces $2.5 Billion Investment Led by Citadel". Business Wire. November 29, 2007. 
  13. ^ "E*TRADE Financial and SBI E*TRADE Announce Termination of Branding Agreement in Japan". Business Wire. November 9, 2007. 
  14. ^ "E*TRADE Financial Appoints Chairman Donald H. Layton Chief Executive Officer". Business Wire. March 3, 2008. 
  15. ^ "Scotiabank buys E*Trade Canada". CBC News. July 14, 2008. Archived from the original on February 11, 2009. 
  16. ^ "E*TRADE Financial Corp. Names Robert Druskin Chairman and Interim CEO". Business Wire. December 21, 2009. 
  17. ^ "E*TRADE Financial Appoints Steven Freiberg Chief Executive Officer". Business Wire. March 22, 2010. 
  18. ^ "E*TRADE Financial Appoints Paul T. Idzik Chief Executive Officer". Business Wire. January 17, 2013. 
  19. ^ "E*Trade: Awards & Recognition". E-Trade. 
  20. ^ E-Trade baby turns five
  21. ^ "ETrade Talking Baby Superbowl Ad is Back and on Twitter". 
  22. ^ "E*Trade's talking baby is ready to rise again | Adweek". Adweek.blogs.com. January 27, 2009. 
  23. ^ "The guy who made the E-Trade baby ads is now in charge of advertising at Apple". Business Insider. December 17, 2015. 
  24. ^ "E*TRADE Unveils Super Bowl® XLVII Advertisement". February 1, 2013. 
  25. ^ "E-Trade bids goodbye to its iconic baby". CNBC. March 21, 2014. 

External links[edit]

Coordinates: 40°45′37″N 73°58′51″W / 40.760372°N 73.980799°W / 40.760372; -73.980799