Investment bank Morgan Stanley is acquiring E*Trade Financial Corp., , the online brokerage and financial services provider, in a $13 billion deal.
A Huge Deal
The acquisition would give Morgan Stanley an inroad with the 5.2 million retail investors from E*Trade in what will become Wall Street’s biggest deal since the financial crisis of 2008. The bank is targeting this market, though the estimated $2.7 trillion of assets in Morgan Stanley under control surpass E*Trade’s mere $360 billion.
E*Trade’s customer base is far larger than the three million Morgan Stanley’s, despite lagging in assets. But it’s also another share of the investment landscape; while Morgan Stanley appeals mostly to high-dollar and institutional investors, the zero commission structure of E*Trade brings in more consumer-level retail accounts.
It could also bring the wealth giant closer to crypto-currency markets. In April 2019, E*Trade was reportedly toying with the launch of a trading platform for bitcoin (BTC) and ether (ETH). That service could now be wrapped in Morgan Stanley’s, even though there is no word yet about what that looks like.
This all-stock offer would give 1.0432 Morgan Stanley shares to E*Trade shareholders on each of their shares. It still needs approval from shareholders.
Morgan Stanley previously trialed a payment netting service based on IBM blockchain in late 2018.
Investment banking firms Goldman Sachs and Morgan Stanley are the first companies to use the newly launched CLSNet, with six more members from North America, Europe and Asia, including Bank of China (Hong Kong), agreed to participate in the coming months.
Ram Komarraju, managing director for technology at CLS, told CoinDesk the system is up and running, saying:
“We have matched and confirmed the first transactions and successfully issued a netting report to the counterparties.”
The move by Morgan Stanley comes months after Charles Schwab acquired TD Ameritrade, which had its own interests in crypto space, including investments in ErisX, a platform for cryptoderivative.