Grant Waspi Devin Roloff Katie Schuerman Justin Seno

Grant Waspi Devin Roloff Katie Schuerman Justin Seno

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

History (1980’s) 1980: William A Porter joined with Bernard Newcomb to create Trade. Plus. In 1982, Trade. Plus 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

History (1980’s) 1984: C. D. Andersen counted about 500 customers that traded on Trade. Plus. By 1987 Trade. Plus 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.

History (1990’s) 1991: Porter establishes E*Trade Securities Inc. 1994: With revenues of nearly $11 million, Trade. Plus and E*Trade operate as the fastestgrowing 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.

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.

Corporate Governance ‣Chairman and CEO: Donald Chairman of the Board: November 2007 Chief Executive Officer: March 2008 ‣President Layton & 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

Corporate Governanace 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

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

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

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

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

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

http: //finance. yahoo. com/q? s=AMTD http: //www. tdameritrade. com/welcome 1. 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

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

ETFC SCHW Pvt 1 AMTD Industry Market Cap: 1. 98 B 22. 96 B N/A 10. 87 B 1. 27 B Employ ees: 3, 757 13, 300 41, 9001 4, 202 2. 25 K 63. 70% 22. 70% N/A 22. 20% 15. 30% 1. 90 B 4. 99 B 12. 87 B 1 2. 17 B 1. 37 B 84. 94% 100. 00% N/A 96. 68% 89. 58% N/A N/A 630. 86 M 29. 74% 40. 47% N/A 55. 91% 25. 71% Net Income (ttm): 1. 44 B 1. 12 B N/A 741. 11 M 40. 05 M EPS (ttm): 3. 397 1. 970 N/A 1. 223 0. 78 Qtrly Rev Growth (yoy): Revenue (ttm): Gross Margin (ttm): EBITDA (ttm): Oper Margins (ttm): SCHW = Charles Schwab Corp. Pvt 1 = FMR Corp. (privately held) AMTD = TD AMERITRADE Holding Corporation Industry = Investment Brokerage National 1 = As of 2006

E Trade Perks 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

Why Choose E Trade? Strength ◦ 4. 3 million accounts in 40+ countries worldwide. ◦ $176 billion in customers assets. ◦ Among the highest level of security in the industry.

Why Choose E Trade? Stability ◦ A pioneer in online financial services. ◦ Included in the S&P 500 index since 2004. ◦ Publicly traded since 1996.

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

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

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

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.

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

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? Pa ge. Name=etrade_market_outlook_2008

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

Investing & Trading Bonds ◦ Corporate ◦ Municipal ◦ Government agencies

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.

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

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.

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.

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.

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.

Recent News 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 1 st-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

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

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!!

References https: //investor. etrade. com/governance. cfm>. https: //investor. etrade. com/releasedetail. cfm? Release. ID=297057>. http: //en. wikipedia. org/wiki/E%2 ATrade>. E*TRADE Company Overview: 14 Apr. 2008 http: //yahoo. brand. edgaronline. com/displayfilinginfo. aspx? Filing. ID=5764657 -904728378&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/21001001_3 -216690. html. http: //yahoo. brand. edgaronline. com/displayfilinginfo. aspx? Filing. ID=5764657 -904728378&type=sect&dcn=0001193125 -08 -041906 www. etrade. com