Below are some screwy screenshots from my E*TRADE account (you’ll also get to see what my E*TRADE portfolio looks like). Early this week, I setup a trade in Lucent Technologies (LU). It was a complete chart play. I haven’t been monitoring the stock fundamentally lately, but I recall my last analysis of it was something like “undervalued because people are still scared of the name.” Feel free to ask me more about my rationale behind the trade (or any of the others), but this post will focus on the odd things that were happening with my account as the merger between Lucent and Alcatel (ALA) played out today.
Late last night, I logged into E*TRADE to check some stocks and noticed that my account was short about $1300 from where it was end-of-trading Thursday. My E*TRADE account had just $6300 in it, so this was a BIG BIG drop. My heart sank in my chest as I clicked to get my portfolio report to figure out which one of my lame ass stocks just cost me $1300. Here’s what I saw:
Looks like my LU stock is worth $0. Great.
What! Now remember my LU trade was just a short-term chart play, so I wasn’t even aware that the Alcatel deal was going to go down this week. I might have passed if I did. In any case, seeing the $0 value for LU shares, I knew that this is exactly what happened. A quick check at the news headlines confirmed this. Still, if my Lucent shares were at $0, where were the Alcatel (or ALU ADR) shares I was due? I decided to play calm and wait until morning to call E*TRADE about the discrepancy, but two things were playing through in my mind.(1) E*TRADE somehow forgot to credit me the new Alcatel/Lucent shares I was due.
(2) My stop on LU, which was at $2.49, triggered when the stock went to $0 and a market order was put through which sold my shares at $0.
Obviously #2 didn’t happen. The report showed that I still owned 500 shares of LU, they just weren’t worth anything. And later, I got an E*TRADE alert telling me that my stop order triggered but was invalid. Nice.
I checked my portfolio first thing in the morning and I saw a different picture, although one that was still a little odd.
My LU stock has been exchanged for the ALU ADR, but it’s still worth $0. Hmmm.
It seemed I had gotten my ALU shares, 2561.475409 of them at ~$0.50. That seemed like a very odd price to give the new company’s stock. And the current price was still $0. Ok, I guess I just have to wait for the current price to come out, and I’ll get my $1300 back in my portfolio. Here’s what I saw a few hours later:
Holy smokes. I’m rich, beeyatch!
Jackpot! The current price is in and it’s set at $13.35 (close to the old Alcatel price). I don’t know how I got my 2500 shares at 50 cents, but I now have $34k extra in my account…Now I wasn’t really naive enough to believe that I had really made a 2500% return on some excellent merger play. E*TRADE was still messing things up. Still, I had to try to sell those shares while I had the chance.
Can’t cash out yet.
Now I wouldn’t have confirmed the order if it let me, I just wanted to see what would happen if I tried. Although $34k is a nice amount of money… No, I definitely wouldn’t have wanted to get caught up in the drama that would ensue if I actually managed to sell those shares before anyone noticed. I once had an extra $40 credited into my account from an ATM flaw. It took the bank 3 months to figure it out, but they eventually did and took the money back. I didn’t get into trouble for overlooking the $40, but I can’t imagine the looks I would get if I tried to tell folks that I didn’t notice the $34k in my account that wasn’t there before. In any case, I wouldn’t have been able to put an order through anyway since trading was halted on the stock for most of the day.
Later in the day, my 2500 shares shrunk to 97.600093 shares bringing me back to around the $1300 I started this adventure with.
Things are back to normal.
As a side note, I had trouble putting my stop (now $12.99) back in on the stock. I got a different error message, but I’m guessing you can’t put a stop order in while trading is halted. I’ll just have to keep an eye on this one.
Trouble setting a stop. I can count, can’t I?
So that’s my story and I’m sticking to it. I was a little shocked at moment, but kept my cool throughout the whole affair. I never really thought that E*TRADE had made a mistake, but they should do a better job of keeping their portfolio reports in check… or at least have some message saying that they won’t have conclusive data until…