eTrade 2000 Annual Report Download - page 61

domestic and international regulation of the brokerage, banking and Internet industries;
accounting for derivative instruments and hedging activities;
changes in domestic or international tax rates;
changes in pricing policies by us or our competitors;
fluctuation in foreign exchange rates; and
changes in the level of operating expenses to support projected growth.
We have also experienced fluctuations in the average number of customer transactions per day. Thus, the rate of growth in customer
transactions at any given time is not necessarily indicative of future transaction activity.
We have incurred losses and we cannot assure you that we will achieve profitability
We have a long history of incurring operating losses in each fiscal year and we may incur operating losses in the future. We incurred
net losses of $402,000 in fiscal 1998 and $56.8 million in fiscal 1999. Although we have achieved profitability in fiscal 2000, that was
due in part to sales of investment securities we cannot assure you that profitability will be sustained.
The market price of our common stock, like other technology stocks, may be highly volatile which could cause litigation
against us and shareowner losses
The market price of our common stock has been, and is likely to continue to be, highly volatile and subject to wide fluctuations due to
various factors, many of which may be beyond our control, including:
quarterly variations in operating results;
volatility in the stock market;
volatility in the general economy;
changes in interest rates;
announcements of acquisitions, technological innovations or new software, services or products by us or our
competitors; and
changes in financial estimates and recommendations by securities analysts.
In addition, there have been large fluctuations in the prices and trading volumes of securities of many technology, Internet and
financial services companies, often unrelated to the operating performance of such companies. In the past, volatility in the market price
of a company’ s securities has often led to securities class action litigation. Such litigation could result in substantial costs to us and
divert our attention and resources, which could have a material adverse effect on our business, financial condition and operating
results.
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We may need additional funds in the future which may not be available and which may result in dilution of the value of our
common stock
In the future, we may need to raise additional funds for various purposes, including to expand our technology resources, to hire
additional associates or to make acquisitions. Additional financing may not be available on favorable terms, if at all. If adequate funds
are not available on acceptable terms, we may be unable to fund our business growth plans. In addition, if funds are available, the
result of our issuing securities could dilute the value of shares of our common stock and cause the market price to fall.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For quantitative and qualitative disclosures about market risk, we have evaluated such risk for our domestic retail brokerage, banking,
global and institutional, and asset gathering and other segments separately. The following discussion about our market risk disclosures
2002. EDGAR Online, Inc.