E TRADE Financial Corp (ETFC)

[RichieRich49]

There are two kinds of financing, debt financing and equity financing. What ETFC did was exchange debt financing for equity financing. What this does it take this debt off of the balance sheet and increases the O/S shares. This probably helps with their capitalization figures but is negative for the shareholders in the short term at least because of the dilution.

They also can only use $111M of the NOLs against future earnings each year for the next 14 years. This just extends the utilization of these losses.

So overall there is not much new here, and even with the increased O/S over the past year ETFC can recover from the housing meltdown and be a profitable entity again. The big question is when.