Long or Short Capital

E*Trade (NASDAQ:ETFC) is a discount broker known for delivering low cost and mostly terrible execution to the investing plebes. How do they achieve such low costs? It’s never been clear how they achieve such low prices, aside from under-staffing, offering terrible customer service, and failing to function when you need them most. But the key to their low cost ways has been revealed. On their front page, they are frequently displaying this image:

From this, we can discern their trading platform was created by forming an LCD computer monitor to a 50’s drag racing engine. The result is a foul chimera that spews a trail of green flames as it ensures its customers get the weakest price possible.

Recommendation: Aside from the possible environmental ramifications of green flames (well known to be associated with the guano fuel source), we have to question if this is the best way to achieve execution for their customers. Our estimates are that the actual engine is almost 84.8% useless, and given the unlikelihood that a heat sensitive component like a CPU could be housed in that engine, we question whether that machine is capable of any computing whatsoever. In all likelihood, the LCD monitor is just displaying random gibberish that looks “stock brokery”. Short E*Trade; we think there is a catalyst for a sharp diminution in E*Trade’s valuation as more evidence of their shaky trading platform comes to light.

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