This is a partial transcript from Your World with Neil Cavuto, April 8, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews. 

NEIL CAVUTO, HOST: It looks like an industry powerhouse is in the works. Online brokerage firm Ameritrade Holding Corp. (AMTD)  announcing that it will indeed buy Datek Online Holdings for nearly $1.3 billion in stock. Combined, the two firms would have about 164,000 trades per day, making the combined entity the nation's largest online brokerage house.

Joining us now to talk about the merger in detail, Joseph Moglia, the CEO of Ameritrade; and Edward Nicoll, the chairman and CEO of Datek Online Holdings. Gentlemen, welcome to both of you.


CAVUTO: Maybe I can begin with you, Edward, if you don't mind. You had a lot of people sort of kicking your tires. Why did you settle on the guy next to you?

EDWARD NICOLL, CHAIRMAN & CEO, DATEK: Well, it was a great opportunity for us. When we looked at the opportunities that were in front of us and went, I spent a lot of time with Ameritrade -- we just realized how close a fit there was between our two organizations culturally and also from a business model point of view.

And when we put these two companies together, both from our customers` perspective with the complimentary services that we offer, the technology and the additional services and quality services that Ameritrade has, and from a financial perspective, the synergies that we could extract from putting these two companies together, it was an easy decision for us. As new shareholders of Ameritrade, we are very excited about the combination.

CAVUTO: Now, Joe, obviously you paid a lot of bucks to get your hand on this company here. Not you personally, but certainly your company. I am wondering now given the fact that the market still has trouble getting its footing, that the day trading crowd is not what it used to be by a longshot, whether you might have paid too much?

MOGLIA: Neil, the fact of the matter is I think we got an absolute bargain here. We merged with an incredible franchise. They've got great products, great technology, wonderful talent. And the account base at Datek is far more productive and active than any other account base in the entire industry.

CAVUTO: And do you see that continuing, Joe? In other words, this appetite to trade online, it has not dissipated significantly to you?

MOGLIA: Well, Neil, you know, it has over the span of the last three years. But the fact of the matter is you look at the market opportunity, there are 20 million clients that trade online today. Five years from now, there is going to be 50 million clients that trade online. That is going to be enhanced by broadband.

So, I think in effect, regardless of what happens with the overall market, this is a growth area. And what we are trying to do is build a platform where we can provide our clients with get value proposition, but balance that with being able to give our shareholders a good return.

CAVUTO: Ed, could I ask you just your view off the market right now? I mean, the online appetite, notwithstanding, it seems, as I say, have trouble to get ahead. I mean, it's two steps forward and then three steps backward. What do you make of it?

NICOLL: It has been a terrible market, you know, a very challenging market for everybody over the last two years. You know, I have been in either the discount brokerage business, the online business since 1978. And I must say, this is the most challenging retail environment I've ever experienced.

CAVUTO: How long will it last, Ed?

NICOLL: I don't know. What is interesting about this merger is all of the numbers that we've run assume a steady state market from here. And we are not looking for the market to return, but if it does, this is going to be one powerful combination.

CAVUTO: Do you agree with that, Joe?

MOGLIA: I know exactly how long it is going to last, Neil. It is going to last 8 1/2 months, maybe nine months of this stretch. And it is going to go up about 20 percent.

CAVUTO: So by that, you are saying that the times they are a changing and will improve, but it will be a while?

MOGLIA: It is going to happen over time. We know that.

CAVUTO: OK. Gentlemen, I want to thank you both and congratulate you both on this, and thanks as well for juggling on us with all these news developments.

MOGLIA: We appreciate that. Thanks, Neil.

NICOLL: Thanks, Neil.

CAVUTO: OK. Thank you very much. The principles behind the merger of Ameritrade and Datek, both stocks treated favorably on Wall Street today.

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