Investors would suppose that TD Ameritrade (AMTD) and E*Trade (ETFC) shares would be on fire today after The Wall Street Journal broke the story that the companies were in merger talks.
But, with the Dow up 1%, shares in ETFC are up less than 2% at $15.88, well below their 52-week lows. AMTD is better by 4% at $17.
Combining the companies should yield a very significant back office savings in areas like computer systems and customer service. And, there should be a pricing advantage to being the largest discount broker with 11 million customers. Of course, the government might not like the idea of all the little discount brokers getting beaten up.
Whatever the reason, there is almost no appetite for the merger.
Douglas A. McIntyre