E*Trade Group Inc, the internet investment service company has secured a major investment from Softbank Corp, which has paid $400m to acquire 15.6 million new shares in E*Trade, representing a 27.2% stake in the Palo Alto company. Softbank bought the shares at $25.56 each. Softbank and E*Trade have been close for some time. Softbank was one of its original venture capitalists and the two companies have formed joint ventures in Japan and just last week, in Softbank’s native Korea. E*Trade’s shares were suspended Friday just after 3pm ahead of the news and at that point were trading at $24.50. The deal will probably be good for E*Trade’s stock this week, because despite the obvious dilution, it means Softbank thinks the shares are worth north of the $25.56 it aid. Softbank also owns 31% of Yahoo! Inc, 35% of GeoCities Inc and 71% of Ziff-Davis Inc and links between E*Trade and those three are expected as a result of this deal.
