September 15th, 2020 | 11:38 CEST
E*TRADE, flatex, wallstreet:online: the winners of the Corona Pandemic
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"[...] The mere fact that we have to write off around EUR 5 million shows that mistakes were made. We have to admit this quite openly to ourselves. [...]" André Kolbinger, CEO, Smartbroker Holding AG
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
E*TRADE FINANCIAL CORPORATION
WKN: A1CZ84 ISIN: US2692464017 Symbol: ETRA
E-Trade is one of the pioneers of online trading. Already in the 90s the company enabled a broad mass of people to trade shares via the Internet connection on their home computer. The hype of the dotcom bubble is partly due to the fact that more and more private investors questioned their portfolio every day and switched to shares of technology companies. Old economy stocks were frowned upon and the new economy had the say with its future plans.
It's like a license to print money when the operators of a trading platform earn money from every customer buy and sell. With the right timing, the shareholders of E-Trade have been able to multiply their assets over the past decades. The decisive factor is that the market phase tends to be rising, because that is when customers are particularly active. Taking and reallocating profits is more attractive from the operator's point of view than if the masses want to sit out loss positions. The market value of E-Trade is currently around EUR 9.8 billion.
WKN: FTG111 ISIN: DE000FTG1111 Symbol: FTK
The online broker flatex was created about 14 years ago and has since then focused most of its efforts on the German-speaking world. The dynamic growing company's expansion was especially characterized by low transaction costs for the customers. The acquisition of DeGiro in 2019 enabled the company to further expand its customer base outside the German-speaking region.
A major advantage of flatex since its early days is the access to potential customers via the Börsenmedien Verlag of the entrepreneur and flatex shareholder Bernd Förtsch. Already during the time of the Neuer Markt, investors followed the advice of the probably most prominent stock market investor in Kulmbach. The strategy worked out and the value of flatex on the stock markets is now around EUR 1.14 billion.
WKN: A2GS60 ISIN: DE000A2GS609 Symbol: WSO1
The wallstreet:online AG also has its origins in the 1990s and has made a name for itself as a provider of the online platform of the same name for financial information and boards for stock traders. Through the acquisitions of ariva.de, boersennews.de and finanznachrichten.de, the group was able to significantly increase its reach and has now gained access to around three-quarters of all investors in German-speaking countries.
By founding its own online trading format 'Smartbroker', the company now combines the information offered with the opportunity to trade. wallstreet:online thus breaks free from the dependence of the advertising business and can profit in the future from the income from the transaction business with the customers. In a perfect world, the users of the websites become not only customers of Smartbroker, but also shareholders of the company, so that they can participate in the development themselves.
The company's share price is on the rise and there are several reasons for this. On the one hand, a 1 to 8 stock split was initiated at the recent annual general meeting and, on the other hand, as the number of customers at Smartbroker grows, the interest in the company's stock seems to be increasing. With a market capitalization of around EUR 150 million, the company is valued significantly lower than the two other companies that have been positioned in the trading business for some time, which also means price potential if the success continues.
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