Just two days after getting a public lashing from hedge fund honcho Ken Griffin for poor financial performance, online brokerage firm ETrade Financial said it hired an investment banker to explore ways to boost the stock price, including a possible sale of the company.
ETrade, known for its talking-baby ads, said yesterday that it retained Morgan Stanley to conduct a “broad review of strategic alternatives,” submitting to demands from its largest shareholder.
Shares of the New York retail brokerage jumped 4 percent in after-hours trading to $16.30 after closing up 1.3 percent to $15.64. On Wednesday, the stock jumped 14 percent after Griffin’s Citadel hedge fund sent a letter to ETrade slamming the company.
Still, ETrade refused to capitulate to another of Griffin’s demands that it call a special shareholder meeting to oust two directors: Donna Weaver, a retired founder of a investor relations and corporate communications firm, and Michael Parks of Crescent Capital Finance Group.
“ETrade believes that Citadel’s proposal to call a meeting to remove two highly qualified independent directors is inappropriate, and contrary to Delaware law,” the company said in the statement.
Griffin’s motives for booting the directors is unclear. In his letter, Griffin blasted ETrade CEO Steven Freiberg for “catastrophic losses.” Griffin, who owns a 10 percent stake, insisted the board hire an investment bank and call a special meeting to replace the two directors.