E*Trade Expands Its Chicago Presence

Despite losing nearly half its stock value in 2002, online financial services firm E*Trade Group is continuing with a string of acquisitions, this time bringing institutional broker Engleman Securities Inc. into the fold.

The deal, reportedly valued at $7.25 million, is expected to enhance E*Trade’s presence on the Chicago Stock Exchange. Engleman Securities handles about 15 million shares a day and has 16
employees, nine of whom are block traders who specialize in trading large quantities of stock, according to a Reuters report.

Last year E*Trade bought Dempsey & Co., a market maker on the Chicago exchange, for $173.5 million in cash and stock. Founded in 1882, the Chicago exchange trades more than 3,600 stocks and has 450 memberships.

Last week, on Christmas Eve Day, the Menlo Park, Calif.-based company’s E*Trade Bank completed the acquisition of Ganis Credit Corp., a U.S.-based subsidiary of Deutsche Bank AG, adding recreational vehicle, marine and motorsport loans to its existing suite of consumer lending products. That deal was valued at $101 million.

Last April, E*Trade snapped up privately held Tradescape for $100 million in stock and bought online trading assets from A.B. Watley for another $5 million.

Despite the diversification efforts, E*Trade’s stock price is a shade below $5; its 52-week high is $12.64.

For the third quarter, the company reported fully diluted net earnings of 6 cents a share on revenues of $330 million, compared to a loss of 72 cents a share on $244 million in revenues for the same period a year earlier. Analysts on average are expecting EPS of 14 cents for the fourth quarter.