Please ensure Javascript is enabled for purposes of website accessibility

E*TRADE Financial Shareholders Approve Morgan Stanley Deal

By Eric Volkman – Jul 17, 2020 at 6:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There were very few "no" votes in the brokerage's tally.

The consolidation of the online brokerage segment has taken another big step forward. On Friday, E*TRADE Financial (ETFC) announced that its shareholders voted overwhelmingly to approve their company's merger with white-shoe financial services mainstay Morgan Stanley (MS -1.06%).

E*TRADE said that 99% of its investors voted in favor of the deal, according to a preliminary count. The merger, which in effect is an acquisition by Morgan Stanley of its peer, was agreed to by both companies in February. It will be transacted entirely in Morgan Stanley stock and is valued at roughly $13 billion.

The intertwined hands of a married couple.

Image source: Getty Images.

At the time, E*TRADE said the deal would bolster one area of its operations, in particular. "By joining Morgan Stanley, we will be able to take our combined offering to the next level and deliver an even more comprehensive suite of wealth management capabilities," it wrote in the press release trumpeting the arrangement.

The Morgan Stanley/E*TRADE deal came shortly after another big-ticket transaction in the brokerage sphere. Last November, Charles Schwab signed a similar agreement to purchase TD Ameritrade. Like the subsequent Morgan Stanley acquisition, this was also done as an all-stock deal, albeit a much larger one at up to $26 billion in value.

After a withering commission price war erupted in the sector in 2019, revenue and margins for many brokerages came under strain. This was a major factor in the industry's consolidation beginning that year.

E*TRADE investors seemed to shrug off their fellow shareholders' approval of the Morgan Stanley deal, likely because it was expected by many. E*TRADE's stock essentially traded sideways on Friday.

 

Eric Volkman owns shares of TD Ameritrade. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Morgan Stanley Stock Quote
Morgan Stanley
MS
$79.01 (-1.06%) $0.85
E*TRADE Financial Corporation Stock Quote
E*TRADE Financial Corporation
ETFC
The Charles Schwab Corporation Stock Quote
The Charles Schwab Corporation
SCHW
$71.87 (-1.06%) $0.77
TD Ameritrade Holding Corporation Stock Quote
TD Ameritrade Holding Corporation
AMTD

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.