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.
Robertson, who resigned from Robertson Stephens last year, will be an
investor in the new company. However, he is prohibited from being involved
in daily management of the company until a non-compete clause he signed at
Robertson Stephens expires in about a year.
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.
