S&P 500 Component
|Founded||Palo Alto, California (1982)|
|Headquarters||Time-Life Building, New York City, United States|
|Revenue||US$1.428 billion (2015)|
|US$268 million (2015)|
|Total assets||US$47.94 billion (2016)|
|Total equity||US$5.799 billion (2015)|
Number of employees
E-Trade Financial Corporation (stylized as 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.
As of December 31, 2015, the company had 3,213,541 brokerage accounts and a total margin receivables balance of $7.4 billion.
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.
In August 1996, the company executed an initial public offering.
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. TD Waterhouse wound up merging 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, 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.
Subprime portfolio divestiture in 2007
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.
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.
Post subprime reorganization
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.
In July 2008, E*Trade sold its Canadian division to Scotiabank for CAD$444 million, as part of a program to stabilize the company.
In December 2009, Robert Druskin, a former chief operating officer of Citigroup Inc. was named interim CEO and chairman.
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.
On September 12, 2016, Karl A. Roessner was appointed CEO.
"E*Trade Baby" Advertising Campaign
E*Trade Baby was an integrated advertising campaign that appeared in online, television, print, and social media.
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. 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".
The E*Trade baby was voiced by comedian Pete Holmes.
The campaign was created by Tor Myhren, then of Grey Global Group.
On March 21, 2014, the company announced the end of the E*Trade baby via a commercial which aired during March Madness.
- Comparison of online brokerages
- 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.
- E-Trade Financial Corporation 2015 Form 10-K Annual Report
- E*Trade Financial Corporation History
- E*Trade Prospectus - Initial Public Offering
- E*Trade: Frequently Asked Questions
- "E*TRADE Acquires Web Street for $45 Million in Stock". PRNewswire. May 21, 2001.
- Valdmanis, Thor (January 14, 2004). "TD Waterhouse, E-Trade talk merger". USA Today. Retrieved May 1, 2010.
- Austen, Ian (June 23, 2005). "TD Waterhouse USA Is Sold to Ameritrade". New York Times.
- Goldstein, Steve (August 22, 2007). "E-Trade and TD Ameritrade have discussed merger". Marketwatch.
- E-Trade to acquire BrownCo for $1.6B. San Francisco Business Times. September 30, 2005. Accessed September 12, 2007.
- "ANZ's Etrade unit has 'no links' to US firm". The Australian. November 14, 2007.
- "E*TRADE Financial Announces $2.5 Billion Investment Led by Citadel". Business Wire. November 29, 2007.
- "E*TRADE Financial and SBI E*TRADE Announce Termination of Branding Agreement in Japan". Business Wire. November 9, 2007.
- "E*TRADE Financial Appoints Chairman Donald H. Layton Chief Executive Officer". Business Wire. March 3, 2008.
- "Scotiabank buys E*Trade Canada". CBC News. July 14, 2008. Archived from the original on February 11, 2009.
- "E*TRADE Financial Corp. Names Robert Druskin Chairman and Interim CEO". Business Wire. December 21, 2009.
- "E*TRADE Financial Appoints Steven Freiberg Chief Executive Officer". Business Wire. March 22, 2010.
- "E*TRADE Financial Appoints Paul T. Idzik Chief Executive Officer". Business Wire. January 17, 2013.
- "ETrade agrees to acquire OptionsHouse parent for $725 million". Market Watch. July 25, 2016.
- "E*Trade: Awards & Recognition". E-Trade.
- E-Trade baby turns five
- "ETrade Talking Baby Super Bowl Ad is Back and on Twitter".
- "E*Trade's talking baby is ready to rise again | Adweek". Adweek.blogs.com. January 27, 2009.
- "The guy who made the E-Trade baby ads is now in charge of advertising at Apple". Business Insider. December 17, 2015.
- "E*TRADE Unveils Super Bowl® XLVII Advertisement". February 1, 2013.
- "E-Trade bids goodbye to its iconic baby". CNBC. March 21, 2014.