The prolonged search for E*TRADE's
This has been a hard corner office to fill. When former CEO Don Layton announced that he would retire by the end of 2009, the hunt for a new leader began. As the year inched to a close, board member Robert Druskin -- another former Citigroup exec, by the way -- was tapped as "interim" CEO.
Absent a permanent CEO, buyout speculation ran rampant. It isn't just that E*TRADE would be a logical fit for rivals TD AMERITRADE
Freiberg's signing won't necessarily squash the buyout talk, but it will lower the chatter by a few decibels. E*TRADE also will be seeking shareholder approval for a 1-for-10 reverse split, making it more likely that the Web-based broker will try to bounce back into investing favor on its own.
Reverse splits are a thorny subject. Just ask Sirius XM Radio
E*TRADE's stock isn't risking Nasdaq's boot. It has been consistently trading above $1 for more than a year. However, AIG
A 1-for-10 split at today's prices would propel E*TRADE's sticker price to the teens, where TD AMERITRADE and Schwab are trading. Despite Freiberg's pedigree after his 30-year career at Citigroup, the stock was unlikely to trade in the teens organically, absent a swift return to profitability or a total exorcism of its iffy loan exposure.
E*TRADE's stock opened lower on the news of the CEO appointment and the reverse split, but investors who are in this for the long haul should probably be applauding the moves as the discounter continues to take baby steps back into Mr. Market's good graces..
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