Now, a one-penny difference isn't necessarily a huge deal. Dilution, however, is a huge deal, and that's what it looks like E*Trade may have to do to shore up its capital needs. According to this article, the dreaded issuance of equity might be necessary. I mean, shareholders just don't want to hear that! That's why the stock lost over 27% of its value in the after-hours session on Tuesday.

I can tell you that I would definitely stay away from E*Trade. This is the problem with playing with stocks that might be at bottom-of-the-barrel prices. They're always a gamble, always nothing more than raffle tickets (yes, most pundits use the phrase lottery tickets, but I was striving to be different this time). E*Trade closed at $2.46 on Tuesday before it received the big sell-off. A $2.46 stock is always cause for alarm. Now, I concede, you can't trade on price alone, as price itself isn't always meaningful. But when you see a $2.46 stock, you've got to assume the worst when you start your research.

E*Trade is simply still suffering from its unfortunate past decisions to increase its exposure to financial products. When the housing market collapsed and the global credit meltdown occurred, E*Trade's value was decimated. The stock has now become the plaything of speculators always looking to sell into strength. If you must own a broker (I'm not really interested in this sector at the moment), check out TD Ameritrade (NASDAQ: AMTD) or Charles Schwab (NASDAQ: SCHW). There's really no reason to add E*Trade to a portfolio.

Disclosure: I don't own any company mentioned; positions can change without notice.