[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
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
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.