Paul Nojin from invest4profit has fired another salvo this...

Paul Nojin from invest4profit has fired another salvo this morning at ANZ over their offer for Etrade.

He now reckons that ETrade is worth $6.00.

I'm hanging in for the ride.

"It is ridiculous that ANZ have the gall to
offer just $4.05 a share for E*Trade.

Even so, that is entirely their choice.

In contrast, how the E*Trade board can
have the audacity to suggest you accept
such a small offer is another matter.

Fair dinkum, they're on another planet.

Fortunately, it appears my clients own
more than 10% of ETR between them.

This means ANZ cannot force us to sell.

They need 90% to do that.

It is outrageous that the ETR board has
suggested you accept $4.05.

As I say, they must be from another planet.

Seek has a 2007 P/E of 38.
Realestate.com.au has a 2007 P/E of 45.
Wotif has a 2007 P/E of 39.

In contrast, based on $4.05, ETrade has
a 2007 P/E of just 18.

It's also vitally important to realise that
E*Trade has been run very poorly.

ETRs financials are pathetic compared to
other brokers.

Remember:
1. ETR's technology is a big problem.
2. ETR's research is dangerous.
3. ETR's pricing is just plain dumb.

In other words, there is massive scope
for meaningful short term improvement.

So much so, I believe the said P/E of 18
is literally double what it should be.

If E*Trade was run well, in fast time the
P/E would halve !!!

In other words, the P/E should be just 9.

How can that be considered a fair price ?

Let's look at U.S. brokers for more insight
into what ANZ could or should be paying.

Consider market cap per customer.

It's US$3,000 for ETFC and AMTD.
Based on $4.05, ETR is one third that.

OXPS has a market cap per account in
excess of US$7,000.

That is 7-fold ETR's number at $4.05.

In conclusion, ANZ must pay a lot more.

If they want ETR, we want $6 per share.

Rest assured, they won't get it at $4.05.

Even at $6, ETrade is a steal for ANZ !!!

Best Regards
Paul Nojin
Invest4Profit.com.au"

Fascinating stuff.

let's wait to see what happens next.

A revised (upward) offer on the cards.

Let the market decide what Etrade is truly worth.

I was impressed with BlueIce spotting the takeover before it was announced. Mate! You sure are well informed.