E*Trade, the bane of the industry?

E*Trade has never been considered a mover-shaker sort of company. But it has thrown a wrench into the industry's plans to get over the credit crunch. The problem is its deal with Citadel. The deal, as you may know, calls for Citadel to buy E*Trade's asset-backed securities portfolio for $800 million. The portfolio has a face value of about $3 billion. Ouch! That implies a valuation that a lot of companies couldn't live with. If banks were to mark their ABS down comparably, we're talking about extreme events. So the likes of Citigroup and Merrill Lynch are likely none too pleased. As if in punishment (not really), a Bank of America analyst cut the company to "sell" from "neutral," according to Forbes. He says the sale of ABS portfolio might help. But there's a lot of home equity loans that must be dealt with. Look out below!   

For more:
- here's a Forbes article

Related articles:
- E*Trade drama continues
- Sell-side analysts regaining their stature?

Read more on: E*Trade l Citadel l Citigroup l Merrill Lynch