Ameritrade Holding Corp, the sixth-largest online brokerage firm, has reversed course and says it won’t go ahead with a planned $275m sale of its common stock. Instead, the Omaha, Nebraska- based company will conduct a private placement of $200m in subordinated convertible notes due 2004. Ameritrade needs the money for a scheduled high-budget advertising campaign, substantial upgrades in its technology infrastructure and new staff. The company has seen an increase in customer trades of about 180% in the past 12 months.
The stock sale was shelved at the last minute due to current market conditions, as the company’s shares have lost about a third of their value in the past three weeks. Ameritrade was set to sell about 8.5 million shares, while chairman and co-chief executive Joe Ricketts – who owns more than 50% of the company’s outstanding stock – planned to sell 1.5 million shares. Goldman Sachs, which was slated to act as lead underwriter for the stock offering, will handle the private placement alone. Ameritrade closed at $26.6875 on Thursday, down $1.1875 on the day.
