AMERITRADE Shelf Registration Spurs E*TRADE Speculation Further (AMTD, ETFC, SCHW)

TD AMERITRADE Holding Corporation (NASDAQ: AMTD) has just filed an automatic shelf registration statement with the SEC today, which many rumor mongers may jump on and point to the notion that this lends more credibility to some buyout rumors from yesterday that it may want to acquire E*TRADE Financial Corporation (NASDAQ: ETFC).  AMERITRADE did not offer any terms nor any size or timing, but the offering is solely for senior debt securities and for subsidiary guarantees.  As with most automatic shelf registrations, no underwriters were mentioned by name.

And as far as a use of proceeds, that includes the general corporate purposes: “…from the sale of debt securities to which this prospectus relates will be used for general corporate purposes. General corporate purposes may include repayment of debt, acquisitions, additions to working capital, capital expenditures and investments in our subsidiaries.” That is very standard language, and the notation of the word ‘acquisitions’ is common in almost all of these aut0matic shelf registrations.

E*TRADE shares were down at $1.65 before the filing hit, and now the shares are back in positive territory by 0.5% at $1.70.  As the company effectively is under an interim-CEO status without full-time leadership defined ahead, it is of little surprise that the rumor mongers are pouncing on the name.

This isn’t E*TRADE’s first dance ticket in the rumor mill, and there was increased options activity yesterday… odd for a sub-$2.00 stock.  We have always thought of Charles Schwab Corp. (NASDAQ: SCHW) as a potential acquirer, and there are some of those new ‘bank holding companies’ which could acquires this company on the cheap.

Maybe AMERITRADE could at least get the sharp and witty talking baby campaign rather than the dry Sam Waterston ads.

JON C. OGG