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Why E*trade Australia is No More
In 2016, the final hurdle – for ANZ bank, Australia & New Zealand Banking Group Ltd – was to take Etrade’s investing service.
Etrade had invented a powerful new technology, online trading, which was pioneering technology at the time.
Etrade went under a Merger and Acquisition by the ANZ bank
Who was Etrade back then?
In 1998, Etrade Australia was introduced. Etrade Group had broken new ground in the U.S.
Back then, the online trading universe was much slower and inconvenient. Before a takeover by Australia’s second-biggest bank, Etrade was the first online trading platform in Australia. Most people used dial-up internet.
Almost nobody was running trading apps from their phone’s (Snake was one exception). In fact, before Etrade, it was unrealistic to privately buy and sell shares, without using brokers or paying their weight in fees… This was a crazy innovation.
(Before Etrade, there often weren’t even guarantees third-party trades would be processed expediently. The idea of privately ordering your own shares, without any brokers or paying enormous fees, was very exciting – it was trading’s future.)
Read more: Best Trading Platforms in Australia
Merger & acquisition in 2016
What happened to Etrade Australia – does Etrade still exist?: Yes. The M & A acquisition took place on a mid-May Wednesday, for the princely sum of A$432 million (US$358.6 million), for its online trading platform. But the transactional tool had humble beginnings…created by a physicist and inventor in the early 80s who was interested in developing a process for trading online for retail investors.
By the time ANZ acquired the company in 2007, online trading had been enormously disruptive to the financial sector. The four major banks in Australia were eager to respond to that change, once the 90s internet collapse, they renewed their control through seizing the most widely recognised online investing program.
After ANZ concluded it was more resourceful to have its brand on the centrestage, rather than licensing its brand from the E*TRADE parent company, the deal was a no-brainer. Their press release at the time: “ANZ has a strong brand that is widely recognised and trusted among our customers, so it makes sense to move this platform under that banner.”
This also had the effect of dropping minimum fees – per trade in 2016 – from $39.50 to $19.95! Play-by-play of the acquisition:
- An initial bid of $4.05 a share.
- Sweetened to a bid of $4.30 a share.
(ANZ bank’s market capitalization at the time was A$54.70 billion.)
What is Etrade called now?
While Etrade still operates, it focuses on several other products – rather than its past online trading tool, which is now licenced to ANZ among others:
- High-tech custody platform for advisors.
- Professional guidance for traders.
- Highly-rated stock plan administration platform.
Although eTrade no longer exists in Australia. There are many alternatives such as eToro that offer the same features and even better commission rates.
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