Analyst says E*Trade may go bankrupt

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqif1FOQmJ7c&refer=home

*Trade dropped $4.89, or 57 percent, to $3.70 at 1:33 p.m. on the Nasdaq Stock Market. The stock has fallen 83 percent year, wiping out about $8 billion in market value.

The company is the worst performer in the 12-member Amex Securities Broker/Dealer Index this year, followed by Merrill Lynch & Co., which ousted CEO Stan O'Neal last month after reporting a record third-quarter loss. Merrill shares are down 40 percent.

Shares of E*Trade competitors Charles Schwab Corp. rose $1.30, or 5.9 percent, to $22.53 in Nasdaq Stock Market trading, while TD Ameritrade Holding Corp. climbed $1.08, or 6 percent. For the year, Schwab has advanced 21 percent and Ameritrade has risen 18 percent.

The rivals ``would benefit from any customer fallout,'' Fox- Pitt Kelton Cochran Caronia Waller analyst David Trone, who has an ``in line'' rating on E*Trade shares, wrote in an e-mail. ``Plus, if Ameritrade buys E*Trade's brokerage, then the price just got a lot smaller.''