Battered E*Trade banking on government funds
NEW YORK (Reuters) - The troubles at E*Trade Financial Corp (ETFC.O: Quote, Profile, Research, Stock Buzz) have worsened and now hinge on whether it can secure U.S. government funds that would bring some relief to its book of bad mortgage loans.
Shares of the discount brokerage tumbled below $1 to its lowest price ever this week, indicating that investors think chances are slim it will secure the $800 million it applied for under the Troubled Asset Relief Program (TARP) rescue program.
Roger Freeman, a Barclays Capital analyst attending a business update hosted by Schwab this week, said E*Trade's existence "depends on whether it gets the TARP."
Overall, discount brokers are enjoying a spike in trading revenues, but they face the worst-case prospect of a lengthy bear market during which individual investors could exit in droves.
http://www.reuters.com/article/ousiv/id ... NM20081121
