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Grant Waspi Devin Roloff Katie Schuerman Justin Seno

Grant Waspi Devin Roloff Katie Schuerman Justin Seno. Table of Contents. Investing and Trading E*Trade’s Problems Porters Model Recent News Future Suggestions. History Corporate Governance SWOT Analysis Competitors Why Choose E*Trade. Conclusion. History (1980’s).

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Grant Waspi Devin Roloff Katie Schuerman Justin Seno

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  1. Grant WaspiDevin RoloffKatie SchuermanJustin Seno

  2. Table of Contents • Investing and Trading • E*Trade’s Problems • Porters Model • Recent News • Future Suggestions • History • Corporate Governance • SWOT Analysis • Competitors • Why Choose E*Trade • Conclusion

  3. History(1980’s) • 1980: William A Porter joined with Bernard Newcomb to create TradePlus. • In 1982, TradePlus contracted with C.D. Andersen & Company to put the system online. • July 11, 1983 the first official trade was made by a dentist in Michigan

  4. History (1980’s) • 1984: C.D. Andersen counted about 500 customers that traded on TradePlus. • By 1987 TradePlus was using all its servers at all periods of the day 24/7. Including international customers. • October 1987: The Stock Market Crashed which left online trading services suffering.

  5. History (1990’s) • 1991: Porter establishes E*Trade Securities Inc. • 1994: With revenues of nearly $11 million, TradePlus and E*Trade operate as the fastest-growing private company in the United States. • 1996: Christos Cotsakos is named president and CEO; E*Trade goes public. • 1999: Revenue increases by 134.2 percent.

  6. History (2000-Current) • 2001 the company was facing losses of $241 million. • 2002 the stock price was down from $63 to $8. • After a public relations disaster in 2002, Cotsakos resigned as CEO in January 2003. • That same year E*Trade Group was redesigned as E*Trade Financial Corporation. • E*Trade dedicates to the company's strategy of focusing on brokerage, banking, and lending.

  7. CorporateGovernance • Chairman and CEO: Donald Layton Chairman of the Board: November 2007 Chief Executive Officer: March 2008 • President & COO: R. Jarrett Lilien With the company since 1999 Appointed President & Chief Operating Officer: 2003 Director: November 2006 Served as Acting CEO: Dec 2007 - Feb 2008 • CFO: Robert Simmons Corporate Treasurer: 2001 Chief Financial Officer: January 2004

  8. CorporateGovernanace Board of Directors Chair of Nominating and Corporate Governance Committee: Donna Weaver- Director since April 2003 Chair of the Compensation Committee: Cathleen Raffaeli- Director since April 2003 Chair of the Audit Committee: Michael Parks- Director since April 2003

  9. Strengths • Strong operating record • Recognizable Name Brand • Great Advertising Techniques • Easily Navigable website • User Friendly • Customer Support ex. Show link • 24 hour trading

  10. Weaknesses • Customers defaulting on loans • Takes five days for money to transfer • Decline in operating income and core business • Decline in loan quality • No face to face help • Difficult to predict future • No spending on research development

  11. Opportunities • New Industry plenty of room for growth • Great Name for Internet company • Great New Advertising Campaign may bring in new customers • Online services allows customer convenience of their own homes • International Trading • Possible Future Mergers

  12. Threats • Similar Companies in the Industry • Same Technologies • Competitors have greater market caps • Greater financial position allows for more spending on advertising • Poor economic condition • Ever changing internet technology • Hacking of important Information

  13. Competitors • Ameritrade Holding Corp. merged with • TD Waterhouse Group • The Charles Schwab Corp. • A.G. Edwards • Citigroup Global Markets • FirstFed Financial Corp. • Fidelity Investments • Scottrade Inc.

  14. http://finance.yahoo.com/q?s=AMTD • http://www.tdameritrade.com/welcome1.html • Founded in 1971 • Provides securities brokerage services and technology-based financial services • 10.00 Billion Dollar Market Cap • Charges $9.99 Per Trade • 4,402 Employees

  15. http://finance.yahoo.com/q?s=SCHW • http://www.schwab.com • Founded in 1971 • Provides securities brokerage, banking, and related financial services to individual and institutional investors. • Operates in the United States, the United Kingdom, and Hong Kong. • Merged with TD Waterhouse • Market Cap 22.64 Billion • 13,300 employees • Was able to dodge most faulty mortgages due to customer confidence

  16. ETradePerks • Easy online money transfer ex.Quicktransfer • Simple quote searches • Company Information/ Summaries • Alert settings ex. Smart Alerts • Online bill payment • Easy account management • Online Service center • www.etrade.com

  17. Why Choose ETrade? • Strength • 4.3 million accounts in 40+ countries worldwide. • $176 billion in customers assets. • Among the highest level of security in the industry.

  18. Why Choose ETrade? • Stability • A pioneer in online financial services. • Included in the S&P 500 index since 2004. • Publicly traded since 1996.

  19. Why Choose ETrade? • Value • Low commissions and 7000+ mutual funds. • High yields on CDs and money market accounts. • Low rates on mortgages, home equity, and margin loans.

  20. Why Choose ETrade? • Ease • Tools and research to optimize investing, banking and borrowing. • Three levels of investment advice and guidance. • Integrated access to all E*Trade accounts.

  21. Why Choose ETrade? • Service • Access to knowledgeable customer services reps seven days a week. • Three levels of investment advice. • Specialized teams for active, options and future traders.

  22. E Trade Protection Guarantee • Digital Security ID- makes unauthorized login virtually impossible. • Electronic Documents-Curb the identity theft by receiving statements online instead of by mail. • Anti-Virus & Firewall Software-Protect from hackers. • Smart Alerts-Get customized account activity on every transaction by e-mail, PDA, or mobile phone instantly.

  23. Investing&Trading • Stocks • Free streaming real-time stock quotes. • Free independent research from six independent sources. • Advanced charting and stock screeners. • Access to apply for IPOs • Online global stock trading

  24. Investing&Trading • Options • Free education from basic strategies to advanced techniques. • Trading Seminars • Investing Seminars • Audio and Video Podcasts including E*Trades own Market Outlook. https://us.etrade.com/e/t/jumppage/viewjumppage?PageName=etrade_market_outlook_2008

  25. Investing&Trading • Global Trading • Diversify in 6 global markets and five local currencies including Canada, France, Germany, Hong Kong, Japan, and the U.K. • Global Watch lists • Advanced Global Stock Charting • Real-time international quotes

  26. Investing&Trading • Bonds • Corporate • Municipal • Government agencies

  27. Investing&Trading • Account Management • Customizable, complete view of holdings. • In-depth portfolio views and real time balances. • Free electronic quick transfers. • Electronic delivery of statements. • Transaction history, gains/losses, and tax records.

  28. Porters Model *Mergerbetween TD Waterhouse and Ameritrade *Ever Changing Internet Technology * Future Mergers *Citadel • New Customers Daily • Internet Trends • *# of online banks • *#Number of active online traders TD Ameritrade Charles Schwab Fidelity Scottrade Citigroup A.G. Edwards Firstfed *Limited by Available Funding *Percentage Rates *Economy *Storefront banks *Independent Brokers *Brokerage Firms *Other Lending Institutions

  29. E Trade’s Problems • In November of 2007, public concerns about the bank’s holdings of asset-backed securities led to widespread concerns about E*Trade viability. • At this point through December 2007 customers withdrew approximately $5.6 billion of net cash and $12.2 billion of net assets from E*Trades bank and brokerage business. • Many of these accounts were active customers with large cash and securities balances.

  30. E Trade’s Problems • For the year ending December 31, 2007 E*Trade incurred a net loss of $1.4 billion, or $3.40 per share due primarily to losses in the home equity loan and asset-backed securities portfolio. • With the ongoing credit crisis in residential real estate still going on E*Trade expects to lose another $1.5 billion in the next 3 years.

  31. E Trade’s Problems • Still a large amount of projected debt from the home and equity loans connected with the Citadel transaction. • Following the Citadel investment E*Trade’s long-term debt is $3 billion.

  32. E Trade’s Problems • Facing five class action lawsuits and four derivative lawsuits, alleging disclosure violations regarding their home equity, mortgage and securities portfolios. • The SEC has also initiated an informal inquiry into matters related to E*Trade’s loan and securities portfolios.

  33. RecentNews • E*Trade reported a net loss of $15.8 million, compared to profits of $5.9 million for the like quarter a year ago • 33 cent per share loss compared to 15 cent profit per share one year prior. • Charles Schwab's 1st-quarter profit up 12 percent as brokerage gets off to best start in its history • E*Trade takes hedge fund from Citadel • Stock price has reached an all time low

  34. Future Suggestions & Thoughts • Could face difficulties coming back from net losses • May merge with other active trading companies • Company could experience bankruptcy • Better investigate customer loan history • Possible rate cuts could revamp market

  35. Conclusion • Follow E*Trade’s progress in the future! • Thank you for putting up with us today! • WE HOPED YOU LEARNED SOMETHING and have taken something away from this TODAY!!

  36. References • https://investor.etrade.com/governance.cfm>. • https://investor.etrade.com/releasedetail.cfm?ReleaseID=297057>. • http://en.wikipedia.org/wiki/E%2ATrade>. • E*TRADE Company Overview: 14 Apr. 2008 • http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=5764657-904-728378&type=sect&dcn=0001193125-08-041906 • http://biz.yahoo.com/ap/080415/e_trade_earnings_preview.html?.v=1 • http://biz.yahoo.com/ap/080415/earns_charles_schwab.html?.v=12 • http://www.news.com/ETrades-loss-meets-expectations/2100-1001_3-216690.html. • http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=5764657-904-728378&type=sect&dcn=0001193125-08-041906 • www.etrade.com

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