Headline Feeds
E*TRADE® Group Inc. (Nasdaq: EGRP) and Sandy Robertson, founder and former CEO of Robertson, Stephens & Company, today announced plans to invest in a new full-service investment bank on the Internet, called E*OFFERINGTM.
E*OFFERING will initially focus on equity underwritings of approximately US$25 - $50 million.
The new investment company will provide individual online investors who are E*TRADE customers with greater access to subscribed public offerings. The company also plans to reduce the corporate fees traditionally associated with the underwriting process. E*OFFERING expects to begin underwriting its first public offerings later this year.
According to E*TRADE CEO and chairman-elect Christos M. Cotsakos, the new company "means more access to the public financial markets for individuals," plus, "a far more cost-effective service model for emerging companies, who now can have better control over their most important asset -- their company's shares."
E*TRADE will own approximately 28 percent of E*OFFERING, with an option to increase its ownership to 51 percent. Other financial details of the agreement were not disclosed by the companies.
Leveraging E*TRADE's technology 
and patent-pending Stateless ArchitectureSM, E*OFFERING will conduct much of its investment banking activity -- from IPO roadshows to share distribution and research dissemination -- over the Internet.
The company intends to distribute up to 50 percent of every IPO to online retail investors, more than is currently distributed with most traditional IPOs. E*TRADE customers generally will have first access to these shares. The remaining portion of the offering will be distributed to institutions through the company's planned institutional sales group.
Robertson, a well-known investment banking industry leader who founded Robertson, Stephens in 1978 and resigned as chairman in 1998, will be an investor in the new company. Walter Cruttenden III, another leading executive in the investment banking industry, will serve as president of the new company.
