E*Trade Launches Distribution Channel for European IPOs
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[London, ENGLAND] Personal financial services company E*Trade Group Tuesday launched an online distribution channel for making initial public offerings (IPOs) available to its clients in Europe.
Named E*Trade International Capital, the new channel has already been selected by banking giant HSBC to distribute shares in the forthcoming IPO for mobile operator Orange to E*Trade clients in the U.K.
E*Trade will make the channel available initially to U.K. users, but has plans to roll it out in several other European countries during the first half of 2001.
Judy Balint, chief international officer of E*TRADE Group, said the company's aim is to democratize the financial markets and that giving self-directed private investors access to IPOs is part of the goal.
"By developing E*Trade International Capital, we are delighted to now provide our European clients with convenient and inexpensive access to IPOs, secondary offerings and fund investment opportunities," said Balint.
A division of E*Trade Institutional Securities Limited, the new channel plans to work with many large investment banks in Europe to win IPO allocations for E*TRADE clients. The banks themselves will benefit by gaining convenient, economical communication with shareholders and early measurement of the real demand for the shares.
"With operations in four European markets and others planned, E*Trade is well positioned to become a leading pan-European online distribution channel for IPOs," said Stephen Murphy, managing director of E*TRADE International Capital.
According to research from Schroder Salomon Smith Barney, there will be a record US $185 billion in European equity offerings in 2001. The gigantic Orange IPO will form a significant segment of the total.
E*Trade says it believes that online investors are often an overlooked source of after-market demand and liquidity following an IPO. Most significantly: its own research on its client base in the United States reveals that users go back to the secondary market to purchase a further 3.5 shares for every share they purchase in an IPO.
E*Trade currently serves customers in Australia, Canada, Denmark, Korea, Japan, New Zealand, Norway, South Africa, Sweden, and the U.K.