In an offering of seven million shares, E*Trade plans to offer five million shares of common stock, while some of its shareholders will put 2 million shares on the block. The company will raise over $125 million based on today's closing share price of 25-3/8.
Shares of E*Trade ended the day down 15/16 over yesterday.
E*Trade plans to use the proceeds for working capital, developing and marketing new products, international expansion, potential future acquisitions, and to satisfy regulatory net capital requirements.
The competition in online trading is heating up as brokerage houses begin to offer a similar service and more online trading services pop up.
PC Financial Network, a pioneer in online trading, has recently expanded its offerings, and Robertson Stephens plan to offer online trading later this year.
Underwriters in the deal include Robertson, Stephens, Hambrecht & Quist, Deutsche Morgan Grenfell, and Montgomery Securities.