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Morgan Stanley Closes Acquisition of E*TRADE
- aerovistae 6y agoDidn't this already happen awhile ago? I'm confused.
- boulos 6y agoThe release seems to be dated as Feb 20, 2020.
- fred256 6y agoThe acquisition closed as of yesterday: https://www.morganstanley.com/press-releases/morgan-stanley-closes-acquisition-of-e-trade https://www.morganstanley.com/press-releases/morgan-stanley-...
- itake 6y agoe*trade sent an email this week to their customers about it. Might be why its showing up again.
- TuringNYC 6y agoIt was awaiting regulatory approval, the deal just closed. It was announced a while back.
- ratsmack 6y agoTD Ameritrade consumed Scottrade and now Charles Schwab is in the process of consuming TD Ameritrade. It seems that consolidation of online trading platforms is accelerating.
- formercoder 6y agoThe margin on trading is quickly becoming negative so banks think they can absorb them and profit on flow and potentially the asset base. MS needs more assets if they want to start lending.
- disown 6y agoNope. They want more data - especially trading data. It's why charles schwab is offering free trades. Apparently they believe the data generated is more valuable than charging $4 per trade. > MS needs more assets if they want to start lending. No they don't, they have nearly a trillion in assets. And if they wanted more assets, they would buy up local or regional banks. Just like tech companies started buying other companies for their "IP", now the trend is towards data. Whether it is to train their algorithms, to package and sell or whatever.
- astura 6y agoCharles Schwab started offering free trades because their competitors all started offering free trades. There was a "fee war" a year or two ago where each brokerage lowered their fees in response to others lowering theirs. https://apnews.com/article/534da63064b54ccdbcbb68434677ff54 https://apnews.com/article/534da63064b54ccdbcbb68434677ff54
- JumpCrisscross 6y ago> they believe the data generated is more valuable than charging $4 per trade They're selling the order flow [1]. Just like Robinhood. This isn't a data play in a tech-company acquisition sense. [1] https://en.wikipedia.org/wiki/Payment_for_order_flow https://en.wikipedia.org/wiki/Payment_for_order_flow
- nemothekid 6y agoI'd be very surprised if Schwab started selling order flow. One reason why the old guys prefer Schwab/TD to robinhood (and paid the commission) was because of more consistent fills because Schwab wasn't selling order flow
- quickthrowman 6y agoSchwab and TD Ameritrade already sell their order flow, which shouldn’t be surprising in the least if you pay attention to stock and option trading. Also, having your order sold to Citadel doesn’t mean you’ll get a worse fill.. Citadel still has to respect NBBO prices for fills
- BurningFrog 6y agoOr are there any small/new companies coming up?
- ratsmack 6y agoI believe Robinhood is the only recent one with any significance in the industry.
- thewebcount 6y agoHaving dealt with both TDAmeritrade and Charles Schwab, I'd say that's probably a good thing. Neither were great, but Schwab was a much better user experience than TDAmeritrade in my opinion.
- edoceo 6y agoI've used both. I love ToS and the two times I've had to get support ToS was great - like the first CSR could repro my bug and filed a ticket - and it's since been fixed.
- dehrmann 6y agoWhile I've had no issues with Schwab, I wonder what they're doing/did that made them the leading discount broker and not get gobbled up by someone. Of course, I'm sure they're also kicking themselves for not getting the Millennial/Gen-Z customers that Robinhood has.
- sgloutnikov 6y agoThey did sell to Bank of America in the 80s, then the founder bought the company back after a few years. I recently read Charles Schwab's book and would recommend it if you are interested [1]. [1] https://www.amazon.com/Invested-Changing-Forever-Americans-Invest/dp/1984822543 https://www.amazon.com/Invested-Changing-Forever-Americans-I...
- thrwn_frthr_awy 6y agoThis is what happens when almost every public co. becomes a growth company—the consolidation is inevitable. They are just buying revenue.
- dehrmann 6y agoA large part of this is that the move to zero-fee trades meant there's less money to maintain current operations, so by acquiring, they can, yes, "buy revenue," and save money by reducing redundancies and economies of scale. A world with zero-fee trades can only support so many brokerages.
- smabie 6y agoIn the past volume was king. A brokerage made money on volume. Nowadays, while volume is still important because of payment for order flow, investing the float has become a lot more important and represents a large portion of brokerage revenue.
- listenallyall 6y agoJust FYI, TD Ameritrade was comprised of Toronto Dominion Bank, which previously swallowed up Waterhouse Securities, buying Ameritrade. So consolidation has been going on for a while.
- jkaplowitz 6y ago>TD Ameritrade was comprised of Toronto Dominion Bank Not exactly - After the Toronto-Dominion bank (aka TD) had previously bought Waterhouse Securities and formed TD Waterhouse, it was Ameritrade that bought the US part of TD Waterhouse from TD and rebranded itself as TD Ameritrade. TD continues to own 40% of TD Ameritrade. After Charles Schwab closes their majority acquisition of TD Ameritrade, TD will continue to own about 13% of the company. But TD has never been a majority shareholder of anything with the word Ameritrade in its name. TD continues to be a major institution in its own right in both Canada and the US, and has engaged in plenty of other consolidation outside the scope of what's currently TD Ameritrade. Not disagreeing with the general point.
- listenallyall 6y agoThanks for the revision, I couldn't remember exactly how that merger/buyout had gone down.
- throwaway96428 6y ago> Charles Schwab is in the process of consuming TD Ameritrade Deal received the final approval last week[0] and is set to close early next week. [0]: https://www.federalreserve.gov/newsevents/pressreleases/orders20200930a.htm https://www.federalreserve.gov/newsevents/pressreleases/orde...
- hateful 6y agoSo the ride continues. Inuit's Sharebuilder -> Capital One Investment -> E*Trade -> Morgan Stanley...
- TuringNYC 6y agoLosing ShareBuilder was a heartbreak. There was no product as good, IMHO. The HN community suggested M1 Finance, though, which has been a pretty close alternative.
- kareemm 6y agoAnd Sharebuilder bought ING Direct’s trading arm...
- mherdeg 6y agoI've had really good interactions with ETrade phone support (working with them on employee stock plan related requests). It has been absolutely refreshingly good customer service -- they know their product so well and know exactly how to offer advice about how to use it.
- TuringNYC 6y agoI agree on ETrade, but the ShareBuilder product itsself was sunset after the merger with Capital One. Their product was to specify a basket of stocks with percentages, specify a dollar amount, and then purchase on some cadence. Dollar cost averaging made simple. Before the various discount trading houses went zero-commission, this was impossible to do cost effectively, since you'd lose more in commissions than you'd gain from dollar-cost-averaging + diversification benefit. Now with zero commissions, it is still hard to do because the process is manual. As an example, suppose you want to purchase $1000/wk of {NVDA 23%, MSFT 27%, GOOG 10%, TSLA 40%}. It should be easy to do. It was with ShareBuilder. You buy less of the stock as it goes up, more as it goes down -- the ultimate buy low "sell" high. M1 Finance is the only product I found which does the Dollar Cost Averaging well with your choice of stocks. There are other products (e.g., Betterment, but then they stick you with stock portfolios -- better in theory, ahem)
- hashtagmarkup 6y agoBOOOOOOOOOOOOOOOOOOO!
- heimatau 6y agoConsolidation is very bad for the markets. These players aren't trying to help the retail markets. They want the data.
- im3w1l 6y agoAs automation increases, we move increasingly from variable per-customer costs to fixed one-time-investment-in-codebase costs. Consolidation should happen.
- lawrenceyan 6y agoThis is entirely thanks to Robinhood. Like the company or not, they've done a great deal to shake things up. In my opinion, it's generally been for the better, and especially so for the average person.
- bob1029 6y agoI am ambivalent on the company (I've recently switched to another), but I have seen nothing else get my friends and family this obsessed with investing and finance. For some, this accessibility is more of a liability than an asset (i.e. gambling addicts with full options access), but I agree that its generally been for the better.
- 0xy 6y agoOptions can indeed be like gambling, but that doesn't mean we should restrict it. It'll just serve to screw over the non-rich just as the "distinguished investor" rules do. The system is already structured to favor the wealthy by denying access, restricting it because of some problems only serves to help them. Additionally, while the gambling house edge might be 1-7% in a casino, stocks are real assets (mostly) representing profitable companies (which on average increase in value over the long term).
- tupputuppu 6y agoMore likely this is due to synergies Morgan Stanley expect, such as being able to cross-sell their other products to Etrade customers, and being able to convert their current customers to Etrade. Even if Etrade is way behind the current generation of fintechs, it's way beyond what the big banks are capable of building inhouse.
- acwan93 6y agoI can’t help but think that eventually we’ll hit the “Big X” of brokerages if this consolidation continues, alongside the acquisition (mergers?) of TD Ameritrade and Charles Schwab. Assuming we have an active FTC soon wouldn’t this lead to calls for to “break up big brokerages”, like there are for banks in 2008 and tech companies today? I’d imagine financial services is fractured and diverse enough where it’s hard to say that only a few key players dominate the market.
- Traster 6y agoI think an interesting element to this is that a lot of the things a monopolist would do in the brokerage market are already highly regulated and considered market manipulation or breach of fiduciary responsibility (although that's been relaxed recently) so maybe there isn't the same natural tendency to monopoly.
- lxe 6y agoI just moved my portfolio from Robinhood to E*TRADE because RH had a scary long-standing bug around calculations after stock splits. I also have a Shareworks account which also was just purchased by Morgan Stanley. Do you think this acquisition will make the products (and how they work with each other) better, or should I head back to Robinhood?
- sabujp 6y agofor arbitraging currently you're getting a 1.58% profit at current ETFC an MS closing prices. it's a funky graph : % profit = ((1.0432 * MS) - ETFC) / ETFC
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- diggernet 6y agoI used to have a Morgan Stanley account. Then Morgan Stanley sold a division to Harrisdirect, and it became a Harrisdirect account. Then Harrisdirect was bought by Etrade and it became an Etrade account. Now apparently I have a Morgan Stanley account again.