Citadel terminates planned E*Trade share sale | Hedge Funds | Alternative Investments
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Citadel terminates planned E*Trade share sale
 
  Hedgeweb - TUE, SEP 01 2009
Funds & Investment Citadel Investment Group LLC reversed course yesterday, cancelling plans to cut its stake in online brokerage E*Trade Financial Corp. by about 10 per cent.

News that E*Trade's largest stock and bond holder would not sell 120m shares into the market over the next three months sent E*Trade stock surging as much as 18 per cent.

"Citadel believes that the termination of the plan at this time is in the best interests of E*Trade and all of its stakeholders," the firm said in a statement. Citadel, whose chief executive, Kenneth Griffin, sits on E*Trade's board, caused a stir earlier this month when it revealed plans to sell 120m shares, or two-thirds of the 166m it held.

Citadel on Monday played down the stock-sale plan, noting 120m shares represents a little more than 10 per cent of its total E*Trade holdings of 1.16bn sharesâ??common stock plus convertibles. The hedge fund firm also holds $850m in straight E*Trade debt.

The announcement of the canceled stock sale plan comes a little more than two weeks after the U.S. Office of Thrift Supervision (OTS), which oversees E*Trade's savings bank and mortgage business, halted a proposal that would have sent nearly all of its customer trades through a Citadel market-making unit.

 
 
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