Ameritrade: Hanging Tough

It was fitting that Ameritrade (AMTD) went public in March, 1997, right before the technology- and Internet-inspired stock market rally created one of the biggest bubbles in market history. Back then, Ameritrade was primarily a discount broker, catering to high-flying day traders. The end of that bull market wiped out many of Ameritrade’s best clients and the company’s stock price, which plunged by over 90% from its peak of $62.79 in April, 1999 before bottoming two years later.

Ameritrade is no longer the same dot-com era trading outfit. While still dependent on trading for around 40% of its earnings, Ameritrade has turned to acquisitions to branch out into other areas of the financial world. In 2006, it purchased TD Waterhouse, allowing it to offer enticing money market rates and boost its asset base. In May 2007, it acquired the Fiserv Investment Support Services Division, continuing TD Ameritrade’s expansion from a pure trading business to a more viable competitor with Charles Schwab (SCHW) and Fidelity.