AMTD - TD Ameritrade Holding Corporation

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
51.72
+0.39 (+0.76%)
At close: 4:00PM EST
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Previous Close51.33
Open51.19
Bid51.60 x 1400
Ask51.75 x 3100
Day's Range51.06 - 51.80
52 Week Range32.69 - 57.88
Volume4522525
Avg. Volume5,970,745
Market Cap28B
Beta (3Y Monthly)1.30
PE Ratio (TTM)13.06
EPS (TTM)N/A
Earnings DateN/A
Forward Dividend & Yield1.24 (2.42%)
Ex-Dividend Date2019-11-04
1y Target EstN/A
  • Bloomberg

    Retail Investors Rushed Back to Risk as Stocks Hit Record Highs

    (Bloomberg) -- As stocks rallied to record highs last month, retail investors embraced the run.Clients of TD Ameritrade increased their holdings of riskier assets for a second consecutive month in November. That pushed the firm’s Investor Movement Index, which has tracked clients’ positioning since 2010, to the highest level in a year, the Omaha, Nebraska-based brokerage said Monday.“As the market got to all-time highs, our clients started to pick up their pace just a little bit more,” JJ Kinahan, chief market strategist at TD Ameritrade, said in an interview. “There might be an expectation of a Santa Claus rally, so-to-speak, as we head into the end of the year.”The S&P 500 Index gained for a third straight month in November, pushing the benchmark to a record closing high of 3,153.63 on Nov. 27. Up 26% this year, the gauge is set for its second best year of the past decade’s bull market.Still, the level of risk allocation in TD Ameritrade’s measure ranks as “moderately low” on a historical basis, according to the firm. Clients continue to buy short-term fixed income products with maturities of six months or less, Kinahan said. However, purchases of bonds in November weren’t as aggressive as earlier this year, and investors are gravitating more toward equities.Below are some of the most popular buys and sells ordered by TD Ameritrade clients last month:BUYS: The Walt Disney Co., Microsoft Corp., McDonald’s Corp., Ford Motor Co.SELLS: Bank of America Corp., Citigroup Inc., Tesla Inc., Netflix Inc.To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • TD Ameritrade (AMTD) Outpaces Stock Market Gains: What You Should Know
    Zacks

    TD Ameritrade (AMTD) Outpaces Stock Market Gains: What You Should Know

    In the latest trading session, TD Ameritrade (AMTD) closed at $51.46, marking a +1.12% move from the previous day.

  • The Man You Brought Tech and Humor to the Brokerage Business
    Bloomberg

    The Man You Brought Tech and Humor to the Brokerage Business

    (Bloomberg Opinion) -- Talk about timing: Masters in Business sat down with Joe Ricketts, founder of TD Ameritrade Holding Corp., on Nov. 12 and 10 days later Charles Schwab Corp. offered to buy TD for $26 billion (Ricketts still owns more than 8% of the company).TD Ameritrade has its roots in First Omaha Securities, a Midwest retail brokerage firm that Ricketts started in 1975. First Omaha introduced a series of technological firsts that helped drive its rise: It was the first to advertise a toll-free telephone service for investors to call and place buy and sell orders, and it was the first to provide price quotes and accept orders via touch-tone phone. Not so novel today, but big innovations more than 30 years ago. In 1995, the company became the first brokerage firm to handle online trading over the internet.In an attempt to cut through the clutter, Ricketts tried to use humor to reach potential clients. Ameritrade became famous for its slack stick dot-com-era TV advertising. The best known was the “Let’s Light This Candle” ad, featuring Stuart the office boy as the main character. It became a viral meme before such things even existed. First Omaha bought lots of other regional brokers, eventually going public in 1997 and later merging with TD Waterhouse in 2006. Now it's TD that's being bought.Ricketts is the author of "The Harder You Work, the Luckier You Get: An Entrepreneur’s Memoir." His family trust has owned the Chicago Cubs since 2009; the team won the World Series in 2016, its first championship in 108 years. His favorite books are here; a transcript of our conversation can found here.You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.Next week, we speak with Ben Horowitz, founding partner of famed venture capital firm Andreessen Horowitz, and author of "What You Do Is Who You Are: How to Create Your Business Culture."To contact the author of this story: Barry Ritholtz at britholtz3@bloomberg.netTo contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Moody's Affirms TD Bank's Ratings, Outlook Remains Stable
    Zacks

    Moody's Affirms TD Bank's Ratings, Outlook Remains Stable

    TD Bank's (TD) minimal exposure to risks and TD Ameritrade's recent deal impress Moody's.

  • Will the TD Ameritrade Buyout Send TD Bank (TSX:TD) Stock Higher?
    The Motley Fool

    Will the TD Ameritrade Buyout Send TD Bank (TSX:TD) Stock Higher?

    With TD Bank's (TSX:TD)(NYSE:TD) biggest subsidiary about to be bought out, is its stock a buy?

  • Moody's Affirms Schwab, TD Ameritrade Ratings, Outlook Stable
    Zacks

    Moody's Affirms Schwab, TD Ameritrade Ratings, Outlook Stable

    Moody's affirms the ratings of Schwab (SCHW) and TD Ameritrade (AMTD), following the announcement of the all-stock deal between the two.

  • Schwab's Buyout of TD Ameritrade to Shake Up Online Brokerage
    Zacks

    Schwab's Buyout of TD Ameritrade to Shake Up Online Brokerage

    Schwab's (SCHW) deal to buy TD Ameritrade (AMTD) is likely to be accretive to earnings and lead to cost synergies. It is expected to pave way for more consolidations in the online brokerage space.

  • TD Ameritrade (AMTD) in Focus: Stock Moves 7.6% Higher
    Zacks

    TD Ameritrade (AMTD) in Focus: Stock Moves 7.6% Higher

    TD Ameritrade (AMTD) saw a big move last session, as its shares jumped nearly 8% on the day, amid huge volumes.

  • TD Ameritrade deal was 'executed brilliantly' by Charles Schwab: Expert
    Yahoo Finance

    TD Ameritrade deal was 'executed brilliantly' by Charles Schwab: Expert

    Charles Schwab announced on Monday it will buy rival TD Ameritrade in a deal valued at roughly $26 billion.  

  • Developed Stocks Hit a Record as Merger Mania Tops $70 Billion
    Bloomberg

    Developed Stocks Hit a Record as Merger Mania Tops $70 Billion

    (Bloomberg) -- A buyout frenzy is taking hold of boardrooms from Tokyo to San Francisco, and it’s adding fuel to a record-breaking rally across the world’s major stock markets.More than $70 billion of deals has already been announced this week, with Charles Schwab Corp.’s $26 billion buyout of discount brokerage TD Ameritrade Holding Corp. leading the pack. Luxury goods giant LVMH, Swiss drugmaker Novartis AG and Japanese conglomerate Mitsubishi Corp. are among a slew of companies which have also announced multibillion-dollar transactions.For investors, the sudden burst of activity is being seen as a vote of confidence in the outlook as recession fears ebb and the U.S. and China edge toward a trade deal. The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index all closed Monday at records, and the MSCI World Index of developed-market stocks was trading at an all-time high on Tuesday.“The recent M&A explosion reflects an undeniable economic optimism,” said Brock Silvers, managing director at Adamas Asset Management in Hong Kong. “The U.S. enjoys both low inflation and unemployment, while the Fed looks dovish, and trade talks are rumored to be nearing an initial success. Investment capital is plentiful and cheap.”That cheap cost of funding is the common denominator across the deals, which have motives ranging from industry consolidation to diversifying into new markets. Policy makers across the world have been cutting interest rates in a bid to shore up economic growth, and the Federal Reserve and European Central Bank have even been forced to expand their balance sheets.Given the low cost of borrowing, it’s surprising there hasn’t been even more merger and acquisition activity, according to Rhett Kessler, senior fund manager at Sydney-based Pengana Capital Group Ltd., which oversees about A$3 billion ($2 billion).For all the optimism spurred by the flurry of dealmaking, there are reasons for caution. Merger and acquisition activity typically tends to peak along with the business cycle, meaning some market participants will read this as a late-cycle signal. Meanwhile deals like Schwab’s purchase of TD Ameritrade are symptoms of structural industry changes, rather than the health of the economy.Investor exuberance beyond the U.S. appears more measured. While the Stoxx Europe 600 is at about the highest since May 2015 and Japan’s Topix Index touched the strongest level this year on Tuesday, both lag the performance of the S&P 500 in 2019.There were at least 10 deal announcements worth $1 billion or more on Monday, according to data compiled by Bloomberg. Here’s a rundown of the key details:Industry ConsolidationCharles Schwab, the San Francisco-based brokerage, announced it would acquire TD Ameritrade, amid a collapse in investing costs as providers embrace $0 feesCanada’s Kirkland Lake Gold Ltd. announced a C$4.9 billion ($3.7 billion) all-share agreement to buy Detour Gold Corp.EBay Inc. is selling its ticket marketplace StubHub to European rival Viagogo for $4.05 billion in cashBranching OutLVMH, the luxury giant that already sells everything from Louis Vuitton bags to Dom Perignon champagne, is adding the 182-year-old U.S. jeweler Tiffany & Co., known for its robin’s egg blue boxesNovartis AG agreed to buy Medicines Co. and its promising heart drug for $9.7 billion, the latest move in the Swiss drugmaker’s push to amass novel treatments for complex conditionsCanadian convenience-store giant Alimentation Couche-Tard Inc. offered A$8.6 billion ($5.8 billion) for fuel retailer Caltex Australia Ltd., sweetening its bid for about 2,000 sites as it seeks to broaden a global expansionJapan Goes AbroadAsahi Kasei is buying Veloxis Pharmaceuticals for $1.3 billion, the latest of a series of deals by Japanese drugmakersMitsubishi Corp. and Chubu Electric Power Co. are expected to buy Eneco of the Netherlands after being selected as the preferred bidders. The deal may help Japan shift toward renewables\--With assistance from Michael Hytha, Fion Li and Samuel Potter.To contact the reporters on this story: Christopher Anstey in Tokyo at canstey@bloomberg.net;Angus Whitley in Sydney at awhitley1@bloomberg.net;Jinshan Hong in Hong Kong at jhong214@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Tom Redmond, Michael PattersonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • What Is TD Ameritrade Holding's (NASDAQ:AMTD) P/E Ratio After Its Share Price Rocketed?
    Simply Wall St.

    What Is TD Ameritrade Holding's (NASDAQ:AMTD) P/E Ratio After Its Share Price Rocketed?

    TD Ameritrade Holding (NASDAQ:AMTD) shares have had a really impressive month, gaining 34%, after some slippage. The...

  • In a $0 Fee World, Charles Schwab Muscles Its Way to the Top
    Bloomberg

    In a $0 Fee World, Charles Schwab Muscles Its Way to the Top

    (Bloomberg) -- For decades, Charles Schwab Corp. quietly plotted to unleash its ultimate weapon against rivals: $0 fees.Schwab considered eliminating charges in the 1990s after the advent of online trading, and again in the 2000s during the financial crisis, according to a person with knowledge of the matter. Each time, it dismissed the idea as too risky -- a danger to its own bottom line.But with investing costs collapsing across Wall Street, the San Francisco-based firm finally took the leap in October -- and, in a matter of weeks, it drove a major rival into its arms.On Monday, days after reports of a possible acquisition first surfaced, Schwab formally announced that it would acquire TD Ameritrade Holding Corp. in an all-stock deal valued at roughly $26 billion.The deal caps a year of off-again-on-again negotiations and cements Schwab’s position in the industry it pioneered a half-century ago.For TD Ameritrade, one of Schwab’s keenest rivals, the tie-up is an acknowledgment of a stark, new reality: One of finance’s most basic businesses, stock trading, has become so mundane that brokers are giving it away for free.Schwab played its hand deftly. First, it sent shockwaves through its industry -- and sent TD Ameritrade stock into a tailspin -- by abruptly announcing last month that it would allow customers to trade stocks and exchange-traded funds for free. Then, it reentered talks that culminated in Monday’s announcement.Chief Executive Officer Walt Bettinger was blunt in early November, telling Schwab clients that discount brokers were headed for a shakeout. But as recently as last week, the company’s Chief Financial Officer, Peter Crawford, was holding his cards close in discussions with industry executives.“What a poker player,” Matt Witkos, head of global distribution at Eaton Vance Corp. in Boston, said of Crawford. “It was pretty shocking.”Falling CostsTradecraft aside, Schwab and TD Ameritrade are both responding to the tectonic shifts in their business. Price competition extends beyond commissions to investment products, too: Fidelity Investments is now charging nothing at all for a handful of its funds.Pressure has been intensifying: In the 1970s, Schwab charged about $70 for a stock trade. By the 1990s, the price had dropped to as little as $30, and in the mid-2000s it cost about $13. After Schwab’s move in October, it was free.The race to zero, after so many years of resistance, partly reflects a generational shift. While many baby boomers are accustomed to paying fees, younger people have come to expect free trading from a new crop of competitors such as Robinhood Financial.Schwab’s TD Ameritrade deal, expected to close in the second half of 2020, would create a formidable giant with $5 trillion in assets. The company would be so large that some analysts have said the deal might draw antitrust scrutiny.Bettinger, the CEO, flicked away those concerns on a call with analysts Monday.“We have numerous competitors, many of which are far larger than us today and far larger than a combined organization,” he said, naming Fidelity and Vanguard Group among the bigger challengers. “They’re going to continue to come right after us, as they are now in all aspects of the business.”Toronto-Dominion Bank, which owns 43% of TD Ameritrade, initially reached out to Schwab, people familiar with the matter said.Schwab’s eliminating of fees prompted TD Ameritrade and other rivals to follow suit. In the wake of the move, TD Bank again reached out to Schwab to restart the discussions, according to one of the people familiar with the matter.Representatives for TD Bank declined to comment.The marriage of Schwab and its smaller Midwest rival left independent advisers and competitor firms scrambling to decode how the combined company will transform the brokerage business, which has already undergone considerable upheaval in recent years.Schwab worked its way up the food chain by leaning into the “discount” part of the discount brokerage business, fueling more than a decade of expansion.The firm got its start in the 1970s by undercutting Wall Street firms that would charge hundreds of dollars per order. It thrived on comparatively low-cost trading into the 1990s, moving online to compete with upstarts including E*Trade Financial Corp.But Schwab lost its way in the early 2000s, charging more than competitors for trading and juggling disparate business lines. To reverse course, founder Charles Schwab returned to the helm and refocused on one thing: cheap fees. That decision to reconnect to the discount ethos helped it grow to its dominant position today.“The logic of Schwab has been -- will always be -- to reduce commissions,” said Robert Burgelman, professor of management at the Stanford Graduate School of Business, who’s followed Schwab for two decades and written case studies on the company.Schwab was able to kneecap its competitors last month with zero fees in part because it relies less on trading for income.Its other business lines include adviser services and its own low-cost investment products. And the firm earns most of its revenue from reinvesting customer cash through its bank division. When falling interest rates threatened that income stream, Schwab announced in September that it was cutting 3% of its staff or about 600 jobs.Monday’s announced deal puts additional heat on E*Trade, which was long thought to be a potential acquisition target for TD Ameritrade. After falling 9% on the day news of Schwab’s move broke, E*Trade’s shares rose more than 3% on Monday.“Frankly, if I’m on the E*Trade board I’m certainly feeling a sense of urgency to find a buyer,” said Thomas Bradley, former president of TD Ameritrade.An E*Trade spokesman didn’t respond to a request for comment outside normal business hours.Some advisers were on edge about the tie-up. Those who use Schwab to safeguard assets wonder if they’ll be able to maintain the same level of service, especially for smaller clients.“Less competition can lead to less negotiating power,” said Matt Cosgriff, a wealth management group leader at BerganKDV.Roger Ward, principal wealth adviser at TrueWealth Management in Atlanta, said that Schwab’s dominant position in the industry made Monday’s announcement almost inevitable.“When they change course it can take time,” he said of the 20,000-person company. “But when they get on the desired course, they are financially strong enough and culturally motivated enough to roll over smaller contributors like TD Ameritrade.”\--With assistance from Suzanne Woolley, Michael McDonald, Matt Turner and Doug Alexander.To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;Matthew Monks in New York at mmonks1@bloomberg.net;John Gittelsohn in Los Angeles at johngitt@bloomberg.netTo contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, David GillenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • US STOCKS-Wall Street sets records on trade progress optimism
    Reuters

    US STOCKS-Wall Street sets records on trade progress optimism

    Each of Wall Street's three major averages kicked off the trading week by closing at records on Monday as signs pointed to progress between the United States and China on a trade truce, while a round of merger deals also helped buoy sentiment. Gains on Monday were broad with only the defensive consumer staples and utilities S&P sectors in the red.

  • Stock Market Live Updates: Stocks rally on deals, S&P 500 and Nasdaq have record closes
    Yahoo Finance

    Stock Market Live Updates: Stocks rally on deals, S&P 500 and Nasdaq have record closes

    Headlines moving the stock market in real time.

  • US STOCKS-Trade optimism fuels S&P, Nasdaq to records
    Reuters

    US STOCKS-Trade optimism fuels S&P, Nasdaq to records

    The S&P 500 and the Nasdaq indexes climbed to new record highs on Monday as signs indicated the United States and China were moving closer to a trade truce, while a host of merger deals also helped buoy sentiment. Gains on Monday were broad with only the defensive consumer staples and utilities S&P sectors in the red.

  • US STOCKS-S&P 500, Nasdaq hit new highs as chips climb on trade optimism
    Reuters

    US STOCKS-S&P 500, Nasdaq hit new highs as chips climb on trade optimism

    The S&P 500 and the Nasdaq indexes hit fresh record highs on Monday as a report that the United States and China were nearing a trade truce sparked a rally in Apple and semiconductor stocks, with sentiment also buoyed by a raft of blockbuster deals. Gains in trade-sensitive chip stocks, including Applied Materials Inc and Lam Research Corp, helped lift the Philadelphia Semiconductor index 2.28% after a Chinese state-backed tabloid said Beijing and Washington were "very close" to an initial pact.

  • Why merging may be better than trying to grow in 2019
    Yahoo Finance

    Why merging may be better than trying to grow in 2019

    Companies have to look to mergers to boost growth, analysts say

  • Bloomberg

    Schwab's Mammoth Deal Has to Win Over the Little Guy, Too

    (Bloomberg Opinion) -- It’s official: Charles Schwab Corp. has agreed to buy TD Ameritrade Holding Corp. for $26 billion in an all-stock transaction. Now the question on Wall Street is whether the acquisition, which would create a behemoth with $5 trillion in assets, will come under scrutiny from antitrust regulators. There are a number of arguments for an antitrust review. For one, Schwab is the market leader in safeguarding assets managed by registered investment advisers, holding about half the market. By purchasing TD Ameritrade, it would add another 15% to 20% share, according to a note from Keefe, Bruyette & Woods. The deal also could allow Schwab to boost fees on other services, or reduce interest paid to investors on their accounts. Effectively, the company eliminated commissions for U.S. stocks, exchange-traded funds and options, but that headline-grabbing move could very well mask hidden charges elsewhere.Bloomberg News’s Felice Maranz and David McLaughlin compiled a roundup of analysts’ expectations. Cowen analyst Jaret Seiberg suggested regulatory scrutiny could stretch into the third quarter of 2020. UBS’s Brennan Hawken sees “a lot of execution risk.” Bank of America Corp.’s Michael Carrier said Toronto-Dominion Bank’s 43% stake in TD Ameritrade could cause “some complications,” including tougher regulatory approval.While the potential hurdles are very real and Wall Street’s concern about them are valid, I’d add another concern: namely, that combining Schwab and TD Ameritrade could be considered “anti-trust” in a different way.One of Schwab’s main competitors, Fidelity Investments, was quick to release a statement on Monday that piggybacked on some of these concerns, noting that "acquisitions of this size can be long, complex, and unsettling.” Kathy Murphy, president of Fidelity’s Personal Investing business, added this:“Unfortunately for investors, the combination of Charles Schwab and TD Ameritrade means they will likely be doubling down on revenue practices that directly disadvantage investors, including paying extremely low cash sweep rates and taking significant payment for order flow. These practices can easily outweigh any benefit of $0 online commissions.”Schwab’s path forward most likely lies in expanding its reach in financial advisory services. That’s a highly personal industry by nature. Sure, some people are willing to take financial planning into their own hands, or use algorithms to help them invest. But even with the internet democratizing all aspects of society, it still feels like the average person would want to have someone holding their hand as they lay out a strategy to buy a house, or send children to college, or save most efficiently for retirement. When it comes to bond markets, for instance, it’s clear that a good chunk of investors don’t have a good handle on what fixed income is all about.   Walt Bettinger, Schwab’s chief executive officer, said in a statement that the combined firm will “be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.” It’s an open question, though, whether Americans prefer to use a massive institution as a one-stop shop. As Cowen’s Seiberg pointed out, there’s something of a growing “anti-big business” sentiment focused on large banks and technology companies. Schwab would seem to be the cross-section of both of those targets.Many details on Schwab’s acquisition and the potential synergies are still to come. But industry consolidation and the growing emphasis on technological innovation will clearly put increased pressure on its small and mid-sized competitors. For those firms, “the risk is that they lose market share, including in smaller communities where more personal brick-and-mortar financial services are harder to come by,” according to Bankrate.com senior economic analyst Mark Hamrick. I’ve written before about how finance industry professionals can easily get lured into sweeping generalizations. In the case of discount online brokers, the line is that no-fee trading is a big win for the consumer. “I’ve been on that pursuit, that mission basically for almost 40 years,” Charles Schwab (the founder) said after the company’s move to zero commissions. “We just hope more people will come and enjoy the benefits that Schwab provides.”If successful, this combination will almost surely bring more investors under Schwab’s tent. It’s up to the company to convince them that even as an industry giant, it’ll always keep the little guy in mind.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    TD Would Unlock Value by Selling Schwab Stake, CIBC Says

    (Bloomberg) -- Toronto-Dominion Bank sees “significant value” from Charles Schwab Corp.’s purchase of TD Ameritrade Holding Corp. -- but that will only be realized if the Canadian lender opts to unload its minority stake in the combined entity, according to one analyst.Schwab agreed Monday to buy the U.S. discount broker that’s 43% owned by Toronto-Dominion in a stock deal valued at $26 billion. The Canadian lender said it supports the transaction, and will exchange its ownership investment for a 13.4% stake in San Francisco-based Schwab. Toronto-Dominion said in a statement that it expects to record a “sizeable” revaluation gain when the deal closes next year.“There is significant value being created by this combination -- value that in TD’s case will only surface if or when the bank decides to monetize its stake,” CIBC Capital Markets analyst Robert Sedran said in a note to clients, adding that the deal will have a “minor near-term impact” for the bank.As part of the deal, Toronto-Dominion will get two seats on Schwab’s board and the firms agreed to a revised insured deposit account agreement that gives the Toronto-based lender a continued earnings stream. Currently, Omaha-based TD Ameritrade has a so-called sweep agreement that shifts its deposits to Toronto-Dominion’s balance sheet for a service fee. Starting July 2021, those deposit accounts, which were $103 billion as of July 31, can be reduced at Schwab’s option by up to $10 billion a year, with a floor of $50 billion. The fee under the 10-year agreement will be set at 15 basis points on closing.The earnings and capital “plusses and minuses” from the deal more or less balance each other out from Toronto-Dominion’s perspective, according to Sedran. The deal is “modestly accretive” to adjusted earnings in the second and third year, given the anticipated expense savings, he said.The transaction is expected to reduce the bank’s adjusted earnings by about C$25 million ($19 million), or 1 cent a share, in its first year, while adding C$65 million, or 4 cents, to earnings in the second year. The earnings lift will rise by the third year to C$125 million, or 7 cents, according to Toronto-Dominion.“We’re looking forward to being large beneficiaries of those synergies as they come through,” Toronto-Dominion Chief Executive Officer Bharat Masrani said Monday in an investors’ call. “I think this is the right thing for TD to do and we look forward to an ongoing relationship with Schwab and participating in this terrific combination.”Toronto-Dominion sees a potential for a C$4 billion to C$6 billion increase in the value of its investment from the deal. Shares of Toronto-Dominion rose 0.5% to C$77.44 at 11:02 a.m. trading in Toronto. A 13% stake in Schwab would be worth about $8.2 billion based on the current share price for the company.“Given that the need for scale in the ebroker sector necessitates a bigger entity than TD would like to allocate sufficient capital to, the reduction in its relative stake should not come as much of a surprise,” Barclays Plc analyst John Aiken said in a note. “As we believe that TD feels it has greater strategic priorities for its capital, we agree with the strategic rationale for a reduced ownership stake.”(Adds analyst, company comment and transaction details from sixth paragraph)To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scanlan, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Charles Schwab to Buy TD Ameritrade, Extending Brokerage-Industry Sway
    Bloomberg

    Charles Schwab to Buy TD Ameritrade, Extending Brokerage-Industry Sway

    (Bloomberg) -- Charles Schwab Corp. agreed to buy TD Ameritrade Holding Corp. for about $26 billion in a deal that will reshape the retail brokerage business.TD Ameritrade stockholders will receive 1.0837 Schwab shares for each TD Ameritrade share, the companies said in a statement Monday. That’s a 17% premium based on the average share price as of the close on Nov. 20.Announcement of the deal comes after news of an acquisition broke on Thursday, sending up shares of both firms. Schwab, America’s original discount broker, will now have even more sway over the sector it pioneered nearly a half-century ago.“Our view is that this is a great deal for the consumer,” Schwab Chief Executive Officer Walt Bettinger said on a conference call Monday with analysts. “We’ve been doing nothing but driving costs down for decades.”The equity value of the deal is $28.3 billion based on Schwab’s closing price of $48.20 on Nov. 22. Schwab shares fell 0.3% at 10:16 a.m. in New York trading. TD Ameritrade, the Omaha-based brokerage that’s partly owned by Toronto-Dominion Bank, rose 4%.The tie-up creates a mega-firm with $5 trillion in assets -- a Goliath that may attract the attention of antitrust regulators, analysts say. Smaller brokerages like E*Trade Financial Corp. will have to contend with a much more formidable competitor.The combined firm will relocate its headquarters to Schwab’s new campus in Westlake, Texas. Schwab’s San Francisco operations will remain a sizable hub.TD Bank, which holds 43% of TD Ameritrade, will own roughly 13% of the new business. Its voting stake will be limited to 9.9%, with the rest of its position in a non-voting class of stock. The Canadian lender will have two new seats on the combined firm’s board, while TD Ameritrade will name a single director.As a result of the deal, Schwab will see its business add 12 million client accounts, $1.3 trillion in assets, and roughly $5 billion a year in revenue.Bettinger downplayed the potential antitrust risks of the combination.“We have numerous competitors, many of which are far larger than us today and far larger than a combined organization,” he said on the call. “They’re going to continue to come right after us, as they are now in all aspects of the business.”Schwab said in the statement that the new firm will have “the resources of a large financial services institution that will be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.”Schwab last month eliminated commissions for U.S. stock trading, forcing other brokerages to follow suit and sweeping away an important revenue stream. Analysts speculated that online brokerages might have to cut deals to survive the increased industry pressure.TD Ameritrade has relied more on commissions than some competitors, drawing 36% of its net revenue from commissions in 2018, compared to 7% at Schwab.QuickTake: Farewell, Fees? How Zero-Cost Investing Caught OnFounder Charles Schwab hinted he was open to dealmaking in an interview with Bloomberg Radio in October.“I don’t know whether we’ll be successful in that pursuit, but in the industry you’re going to see more consolidation, more firms getting together,” he said. “You just have to have that scale and volume.”If the deal goes through, the combined company will have unparalleled clout as top custody service providers to independent financial advisers. That may give authorities pause, Keefe, Bruyette & Woods analyst Kyle Voigt wrote Thursday. He estimates Schwab has about a 50% market share of registered investment adviser custody assets, while TD Ameritrade may have as much as 20%.The acquisition comes after TD Ameritrade announced in July that CEO Tim Hockey would leave early next year. Hockey denied at the time that his departure had anything to do with a potential deal.Credit Suisse Group AG advised Schwab on the deal, while PJT Partners and Sandler O’Neill & Partners advised TD Ameritrade’s board. JPMorgan Chase & Co. advised TD Bank and Barclays Plc advised the family of Joseph Ricketts, TD Ameritrade’s founder and largest individual shareholder.(Updates with names of advisers in final paragraph. An earlier version of this story corrected the name of Sandler O’Neill.)\--With assistance from Matthew Monks and Sheldon Reback.To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;John Gittelsohn in Los Angeles at johngitt@bloomberg.netTo contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Alan Mirabella, Vincent BielskiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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