Morgen Stanleys Acquisition of Etrade: Reasons, Purposes and Prospect

Abstract

Morgan Stanley, the head of investment banking, announced a full-stock acquisition of Etrade on February 20, 2020. This paper intuitively presents the comparison of earnings before and after the acquisition by collecting the relevant data of the acquisition and using Excel to organize the analysis, to carry out a multi-level analysis of the acquisition. The research mainly includes the reasons for Morgan Stanley's business transformation as a top investment bank, acquisition objectives and acquisition future. The main findings of this article are as follows: Morgan Stanley's acquisition of Etrade continues its efforts to deepen the wealth management business since 2010 and pay attention to building a technology platform to assist the digital transformation of the wealth management business, bringing significant and sustainable growth in the net income of the wealth management business. This acquisition looks at the development opportunity of digital retail brokerages, conforms to the trend of industry integration, builds digital banks, expands customer groups, and jointly creates huge synergies. The significance of this paper lies in the complete analysis of the beginning and end of the second high-value transaction on Wall Street after the financial crisis from a long-term perspective, providing a reference for financial enthusiasts to understand the case. Through the study of this article, the advice given to investors is that from the perspective of fundamental analysis, Morgan Stanley's profit is growing steadily, and the relevant business needs of investing in its stocks or choosing the investment bank for personal asset management can be considered.