There's no sugar-coating possible here. Shares of E*Trade have been absolutely shelled today and the company's market cap has been more than cut in half.
On Friday, the company disclosed that its portfolio of asset backed securities (mainly its ABS CDOs) has been looking a little green around the gills since the end of the third quarter, and will likely mean that the company will miss its previous guidance for full year earnings.
Now that news alone would smart, but to top it off, a Citigroup analyst released a report suggesting that liquidity could be a real concern for E*Trade and the possibility of bankruptcy is not out of the question. He believes that the trouble the company has been facing could cause customers to pull out assets en masse.
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