E-Trade Suffers Plunging Losses
An article published by Market Watch takes a look at the losses felt by E-Trade Financial Corp. as it’s shares fell more than half their value. This is a huge loss for the First and Second Mortgage lender. According to the article:
Monday’s declines added to losses that the shares sustained in late trading Friday, after the company warned about further write-downs in the fourth quarter. E-Trade also backed away from an earnings forecast issued less than a month ago, because the value of its asset-backed securities portfolio dropped further.
“Bankruptcy risk cannot be ruled out,” Citi analysts wrote in a note Sunday. They also lowered E-Trade’s rating to sell.
“The continued negative news flow about charges resulting from its mortgage and CDO exposure, an SEC inquiry and continued deterioration in its financial condition all increase the likelihood of significant client attrition,” the Citi analysts said.
E-Trade is just the next name on the long list of companies that have suffered serious losses as a result of the current financial crisis. What is alarming about this ever-increasing list is that as share values drop, so does consumer confidence, which is the fuel of the financial system. Too much bad news could scare consumers enough to bring on an economic standstill, which would prove very detrimental to the nation.
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