E*Trade (ETFC) was worth over $10 billion when its stock traded at $26 in June. Now its market cap is only $2.3 billion. With those numbers, it seems likely to be a great takeover target for another broker. This is great news if another firm can figure out how to fix the failing mortgage assets in E*Trade's banking operation.
Friday, the head of TD Ameritrade (AMTD) indicated that his firm might be a buyer of E*Trade's brokerage customer business.
"We like their retail business but we must figure out a way that makes sense for both sets of shareholders," TD Ameritrade CEO Joe Moglia told CNBC late Friday.
This could be great news for both discount brokerages. Putting together two discount brokers would clearly allow for savings in personnel and marketing costs. However, combining the IT of two different trading platforms might prove to be a nightmare.
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