Schwab cashes out of E-Loan

December 2, 2002

Institutional investors buy up 5.8 million shares in private transaction

Inman News Features

Online loan broker E-Loan said Charles Schwab Corp. sold 5.9 million shares of E-Loan stock to three institutional investors and unnamed E-Loan directors and management.

The 5.9 million shares were Schwab's entire investment in the Dublin, Calif.-based mortgage company.

E-Loan said 5 million shares were purchased by an unnamed new institutional investor, 809,313 shares were added to the holdings of two existing institutional investors and 126,834 shares were picked up by company directors and management.

E-Loan CFO Matt Roberts said he was "pleased to announce the orderly transition of Schwab's shares into the hands of a high-quality institutional investor."

Schwab two weeks ago said it would take a $90 million fourth-quarter charge for an earlier announced 10 percent workforce reduction. That follows a $94 million third-quarter charge for the elimination of 1,900 jobs in September and abandonment of leases for excess office space. The company reportedly has cut 9,300 jobs--35 percent of its workforce--in the last two years.

Inman News reported in April 2000 that Charles Schwab, Abbey National, FT Ventures, Benchmark Capital and Technology Partners had agreed to purchase equity stakes in E-Loan. Schwab, Abbey National and FT Ventures invested $10 million each, while Benchmark Capital and Technology Partners invested $5 million each. E-Loan at that time also entered into a strategic alliance with Schwab's stock brokerage subsidiary.

E-Loan shares were trading at $1.89 and Schwab shares were trading at $11.49 this morning.

Copyright: Inman News Service

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