E*Trade Group, Inc. (Nasdaq: EGRP) was up 1 5/16 to 15 1/4 in morning trading Thursday after the online brokerage announced a change in presidents.
Jerry Gramaglia, who had headed the firm’s marketing division, replaces Kathy Levinson, who is “retiring from the company to concentrate on her wide range of philanthropic and community-service interests,” E*Trade said.
E*Trade and other online brokerages have seen their shares drop amid concern that trading growth will slow as the Federal Reserve pushes interest rates higher to curb inflation. The company is not far above its 52-week low of 13 1/8, while Ameritrade (Nasdaq: AMTD), up 3/8 to 11 9/16 early Thursday, is also near its low of 10 1/2.
James Marks, an analyst at Credit Suisse First Boston, earlier this week told clients to expect a “significant downturn” in second quarter transaction volume for online brokers. Trading in Internet stocks, said Marks in a report, is down 34 percent so far this month, while weekly average volumes are down more than 40 percent from a month ago. “We are projecting sequential quarterly declines in transactions of 10 percent to 20 percent for online brokers,” wrote Marks in the May 22nd report.
Yet E*Trade has seen its account base grow during Gramaglia’s tenure as head of marketing, sales and service quality. The company expects nearly 3 million accounts by the end of the quarter, a 600 percent increase over the past 18 months.
“Jerry Gramaglia is singularly focused on generating top-line growth and bottom-line results in everything we do,” said Chairman and Chief Executive Officer Christos M. Cotsakos.