E-LOAN, Inc. (Nasdaq: EELN) saw its stock soar more than 132 percent by market close yesterday. Whether it was buoyed by the 200 plus point gains on the Dow and Nasdaq or not, the rise could be attributed to the announcement that The Charles Schwab Corporation, FT Ventures, Abbey National, Benchmark Capital, and Technology Partners have agreed to acquire equity stakes in E-LOAN for a total of $40 million in cash. The Charles Schwab Corporation, FT Ventures, and Abbey National contributed $10 million each. Benchmark Capital and Technology Partners contributed $5 million each. Each agreement is subject to E-LOAN shareholder approval.

The announcement comes as a reverse-trend endorsement by Schwab in the light of recent stock market woes for traditional lenders and dotcoms. This announcement just may send a pistol-shot signal to side-lined investors that the time for bargain hunting has begun. E-LOAN is currently valued at about 15 times earnings trailing 12-month sales.

Like so many other companies, E-LOAN's stock had recently taken a beating, but the online lender was under attack on more than one front. Fears of rising interest rates sparked a sell off in virtually all lender stocks, particularly those with large dot.com holdings or investments. With investor disenchantment of dot coms in general, the stock fell with all the others in the category. Hit from both sides, E-LOAN saw its stock plummet to an all-time low of $3 a share long after its high in July of 1999, at a little over $74.

"Attracting investments from these financial institutions and venture capital firms is a strong validation of our business model, market opportunity, and category leadership," said Chris Larsen, E-LOAN's CEO. "This financing is a milestone on our path to profitability and will help accelerate E-LOAN's penetration into the consumer lending markets."

E-LOAN also announced today that it has entered into a strategic alliance with Charles Schwab & Co., Inc., the brokerage firm subsidiary of The Charles Schwab Corporation.

Beginning in June, Schwab is offering customers a complete online mortgage solution through E-LOAN, including the ability to research, compare and apply for a mortgage loan online at www.schwab.com, and then track and close their loan.

Under the agreement, which has a four-year term, retail Schwab customers and prospects will have access to E-LOAN's mortgage products from more than 70 lenders, as well as online rate search, loan comparison and selection, application and loan tracking services.

E-LOAN plans to dedicate customer service representatives to provide personalized service to each borrower from application to close. In the future, the two companies may also provide access to additional customized loan products and debt management tools specifically designed by E-LOAN for Schwab customers and prospects.

"For many of our customers, a home is the largest single investment they will ever make," said Charles R. Schwab, Chairman and Co-CEO of The Charles Schwab Corporation. "Our alliance with E-LOAN will provide customers with a convenient way to shop for and compare low-cost home loan products right from our Web site. It puts them in control and gives them the tools to confidently find the right mortgage for their particular circumstances."

"We performed extensive research that showed a significant number of our customers would seek a mortgage if it was available via schwab.com," said Daniel O. Leemon, Schwab executive vice president, Business Strategy. "After an exhaustive review process involving nine companies, E-LOAN emerged as the best provider. They are a company with a commitment to customer service, superior technology, a choice-based business model with a breadth of products, and a strong management team."

As part of the agreement, Mr. Leemon, a member of the Charles Schwab Corporation's Management Committee, will be nominated to E-LOAN's board of directors. In addition, E-LOAN will grant Schwab warrants totaling 13.1 million shares in 2 tranches. The first tranche consists of 6.5 million shares, has a three-year term, and is exercisable at a strike price of $3.75 per share, subject to certain exercise provisions. The second tranche consists of 6.6 million shares, has a 3 ¹/4 year term, and is exercisable at a strike price of $15 per share. Both tranches of warrants are subject to certain lock-up provisions.