November Stock Talk VII

I need to look it over myself.

If it is a loan then all they did is swap CDO liabilities to a loan..which is better I guess but they also took a 500M hit in doing so.

If it is a sale, then they take the hit and move on but the liability is gone and cash is asset..and that isnt so bad.

I will snoop and see.

Either way it seems like they are trying to sell themselves or at least shed themselves of the bad part of the business.  

Just got my answer and it ISNT good-

That view extends to a $3 billion portfolio of E*Trade's mortgages and other securities, which Citadel now has agreed to buy from E*Trade for $800 million. Citadel also is injecting $1.75 billion into E*Trade, in exchange for 10-year E*Trade notes that pay it 12.5% interest and shares boosting its stake to almost 20% of E*Trade's stock outstanding.

Etrade sold 3B of loans for 800M and will pay 12.5% on the 1.75B loan over 10 yrs.

This is awful putting it lightly. They took a 2 plus BILLION dollar hit on the CDOs and will be paying HUGE interest expense for the loan and shares. I would also be interested in seeing how cheap they got the shares.

This news was out on Wed...not a reason to buy the stock on Monday.

Grid,

No problem!

We all work as a team to get as much info out as possible.

Terrible terms to say the least for Etrade..if they need the cash that bad for those terms it cannot be a good thing.