E*TRADE Financial (ETFCD)

The MBS papers owned by ETFC have not been completely priced. Until these securities are priced the actual book value cannot be fully determined and is just an estimate.

The online broker-dealer industry is very competitive. Falling prices and an increasing number of strong competitors are making more difficult for well-established firms to remain profitable.

E*Trade has a significantly higher mix of net interest revenues than its competitors. This could lead to less growth if the Fed stops tightening interest rates.

The District Court of New York has ruled that investors may proceed with a class action lawsuit against online broker E*Trade Financial Corp over allegations of securities fraud in the collapse of the subprime mortgage market. The judge ruled that plaintiffs have sufficiently pled that E*Trade had present knowledge of the risk and intentionally misled the public. Litigation costs and potential damages E*Trade potentially faces will have a negative impact on company stock.

Following a series of actions to cut back its range of retail banking services, E*Trade announced that it will drop all certificate of deposit accounts and transfer complete savings to Discover Bank. E*Trade has had trouble staying competitive against other online banks, and finally decided to exit the market. With this string of cuts in its business, E*Trade's overall market share continues to shrink, with little improvement over its core business, the online trading platform. The value of E*Trade overall business will continue to drop if no improvements in the business arise.

E*Trade's ability to stay afloat after the subprime fallout is questionable.