E*Trade shares sank Thursday after the online brokerage said one of its biggest investors would sell its stake.
Chicago based hedge fund Citadel plans to sell more than 27 million E*Trade shares in a sale set to occur next week.
That sent shares of E*Trade (ETFC) down 7.5% to $10.93 in afternoon trading.
The news that Citadel was selling its 9% stake in E*Trade signaled to investors that the brokerage will not be put up for sale anytime soon.
Citadel founder Kenneth Griffin had been pushing the company in that direction. Griffin set up a committee in 2011 to explore "strategic alternatives," including a sale.
E*Trade is the third-largest publicly traded online brokerage firm, behind Charles Schwab (SCHW) and TD Ameritrade (AMTD). But the company's mortgage business has struggled in the years since the housing crisis.
Despite Thursday's sell-off, shares of E*Trade are up nearly 23% so far this year. But the stock still remains well below its highs from 2007, when it traded above $250 a share.
Meanwhile, the significance of Griffin's move was clear to some traders on StockTwits.
That could explain the strange odor some traders have detected.
Others see an ulterior motive for Citadel.
Whatever the case may be, it's safe to say the E*Trade spokes-baby is not happy.
E*Trade is looking for a new chief executive.
The online brokerage firm said Thursday that CEO Steven Freiberg has left the company as it works on strengthening its financial position. Last month, E*Trade reported a 24% drop in second-quarter earnings to $35.9 million, or 14 cents per share.
The company did not say why Freiberg left the company but E*Trade has been struggling for years with losses on mortgage-related assets and the continued MOREBen Rooney - Aug 9, 2012 1:22 PM ET
Nasdaq is going to spend $40 million to compensate for trading losses caused by glitches during Facebook's stock market debut last month, but that doesn't mean much for small investors who got burned.
Most average investors put in orders for Facebook shares on opening day through brokerages like Fidelity, Charles Schwab (SCHW) and Scottrade, but those firms aren't direct recipients of Nasdaq's payout.
"Nasdaq's accommodation program is an agreement between the exchange and its MOREHibah Yousuf - Jun 7, 2012 11:00 AM ET
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