Morgan Stanley employs more than 15,000 human advisors (!) and has built a reputation for providing financial advice to high net worth individuals. The bank is now staking its future on the average Jane / Joe by acquiring online broker firm E-Trade for $13b!
Last October, the formerly 3 big brokerages, Schwab, Ameritrade, and E-Trade cut equity trading commissions to ZERO. Ameritrade’s stock immediately dropped by 26% and shortly thereafter, Schwab acquired them (at a “steep” discount) for $26b!
Morgan Stanley is undeniably acquiring technology in this transaction but more importantly, they are also buying 5m retail customers and their $360b in assets (read: low-cost retail deposits) that will be funneled into highly lucrative loans.
As the largest acquisition by a bank since 2008, banks are officially back in the game!
This is the end of a story that started 7 years ago when Robinhood first opened its doors – and in this short time span brought an entire industry to its knees. Let's see how Goldman, aka the Sherriff of Nottingham, will react…
Going For Broke(r)!
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