We all love the convenience of automated teller machines (ATMs). The devices have now become an indispensable part of the cultural financial landscape. Whether you're a graduate student on the go, a teen making plans to see the latest Harry Potter film from the folks at Time Warner
That's why it initially came as a bit of a surprise to me that E*Trade
But then I thought about it and decided that this isn't really a bad move. Not at all. The company will be getting some cash -- $55 million before the effect of the tax guy -- and it will still have some branding capability according to terms of the transaction. CEO Mitchell Caplan just doesn't believe that it is necessary to remain fully invested in this sector, as in doesn't necessarily add enough value to the overall model. Why maintain the ATM system when the net worth of the asset might be better utilized elsewhere? I tend to agree in this case. It's not like this event eliminates the ability of E*Trade's customers to use the money boxes, so I see it as a logical move (E*Trade will continue to refund all ATM surcharges experienced by members of its bank).
The biggest thing E*Trade needs to concentrate on is remaining competitive in the arena of discount brokers, and that essentially translates into providing the lowest commission possible. Ameritrade
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Fool contributor Steven Mallas owns none of the companies mentioned.