E TRADE Financial Corp (ETFC)

[suzyHomemaker]

This Week's 5 Dumbest Stock Moves

http://www.fool.com/investing/general/2009/09/25/this-weeks-5-dumbest-stock-moves.aspx

5. When the E*TRADE Baby turns three
The only thing worse than a nonsensical buyout rumor is putting a timeline on one that makes perfect sense.

BMO Capital Markets analyst Michael Vinciquerra shot down the notion that E*TRADE (Nasdaq: ETFC) isn't an attractive acquisition target until it gets past its mortgage lending uncertainties.

"Buying on a takeover possibility might be a good idea 10-12 months from now, but we think it's foolhardy in the near term," he noted earlier this week.

The problem with that kind of projection is that it's a lose-lose call. If a rival discount broker really wants E*TRADE for its growing brokerage business, they're going to jump in now while the uncertainty creates an attractive price point, and a desperate management team would be more likely to accept a deal. If they wait for the clouds to clear, E*TRADE will be trading much higher and have much less reason to cash out.

Even the E*TRADE Baby knows that.