Here is more from Reuters: E*Trade firesale seen hurting Wall St portfolios (hat tip Alan)
UPDATE: I've received several emails pointing out that Bhatia is probably wrong.
Analysts are suggesting the sale valued the portfolio ranging from 11 cents to 27 cents on the dollar:
Citigroup investment bank analyst Prashant Bhatia said E*Trade actually received 11 cents on the dollar for its portfolio, if you factor in that the brokerage received $800 million in cash minus 85 million shares it issued. He said that implies Citadel's received stock compensation worth about $450 million, leaving E*Trade with only $350 million for its $3.1 billion portfolio.And everyone was surprised by the price considering the assets in the portfolio:
Goldman Sachs analysts said they were surprised by the size of the discount on the E*Trade portfolio because 73 percent of the assets were backed by prime mortgages, or loans to people with solid credit.It is worth emphasizing that a large portion of the assets were backed by prime - not subprime - mortgages. And many of the prime loans were first liens with decent average FICO scores (average 725) and LTV (71%).