Flash: E*Trade gets huge investment from Citadel Investment Group

Posted Nov 29th 2007 6:44AM by Douglas McIntyre

According to The Wall Street Journal "E*Trade Financial (NASDAQ: ETFC), which is ensnared in the mortgage crisis, is getting a $2.55 billion cash infusion from Citadel Investment Group."

Citadel will "purchase E*Trade's entire $3 billion portfolio of asset-backed securities for a value of around $800 million." The balance of the money will go in as 10-year notes with a 12.5% interest rate. Citadel will end up owning 20% of the company and have a seat on the board.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: citadel, e-trade, etfc, inthenews

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Reader Comments (Page 1 of 1)

11-29-2007 @ 10:55PM

Severin Sorensen said...

The deal sounds great for Citadel, and likely the only deal available short of bankruptcy restructuring for ETFC. While everyone is backslapping this one, is anyone looking at Citadels stake, and will this loan vehicle place them atop the debtors (in control) list should ETFC not make the financial turnaround required? Meaning, bad performance for ETFC could mean a debtor in control position for Citadel in the coming months for ETRADE, and they could have sole possession of the company for a song. Benevolence left the finance industry long ago, it would be wise for those long in the stock to consider this.