E*Trade To Launch Internet Investment Bank
Page 1 of 1
Online broker E*Trade Group Inc. Tuesday announced plans to launch E*Offering, a new online investment bank that would give investors expanded service and allow them to get in on initial public offerings.
E*Trade is partnering with Sandy Robertson, founder and former chief executive of investment bank Robertson Stephens & Co., in the venture. E*Offering promises to give E*Trade customers greater access to IPOs at lower fees.
E*Trade will own about 28 percent of the company, which will be based in Newport Beach, Calif. E*Trade Chairman-elect and Chief Executive Christos Cotsakos and Chief Operating Officer Kathy Levinson will serve on the company's board. E*Trade will also have an option to increase its stake to 51 percent.
No financial details were disclosed.
E*Offering plans to initially focus on underwritings ranging from $25 million to $50 million. It will also offer investors after-hours trading and merger and acquisition advising.
Cotsakos said E*Offering is another step in the company's journey to democratize the financial markets.
"It means more access to the public financial markets for individuals and a far more cost-effective service model for emerging companies who now can have better control over their most important asset -- their company's shares," he said.
The company plans to distribute up to 50 percent of IPOs it is involved in to online retail investors. The remaining portion will go to institutions that will be handled by an institutional sales group.