E*Trade, known for its Super Bowl commercials starring a talking baby, is one of the most popular online brokerage firms but has seen its stock decline 94% over the last five years.
NEW YORK (CNNMoney) -- The E*Trade baby may soon have a reason to stop crying.
E*Trade Financial () shares surged more than 15% Wednesday, after the company's largest shareholder publicly urged a possible sale of the company.
Citadel, the hedge fund that owns a 9.8% stake in the company, sent E*Trade a letter filed with the Securities and Exchange Commission, requesting a special shareholder meeting to discuss strategic alternatives, including a sale of the company.
Citadel is basically fed up after E*Trade posted four years of losses and saw its stock decline 94% over the last five years.
"The facts speak for themselves -- stunning losses from the Company, catastrophic losses for the shareholders," the letter said. "This is the story of E*Trade's poor management decisions."
Citadel cited toxic mortgage-backed securities as weighing on the company, and specifically called for the removal of Michael Parks and Donna Weaver from the company's board.
The letter claims that five of E*Trade's board members received $7 million in compensation, while presiding over the company's mortgage investment strategy and costing the company millions in losses.
E*Trade is the third largest publicly traded online brokerage firm, behind Charles Schwab (Fortune 500) and TD Ameritrade ( ).,
While E*Trade's brokerage business is strong, its $15.8 billion loan portfolio -- which includes mortgages and home equity loans -- remains a challenge for the company.
"The brokerage business is clearly attractive here, but if you buy the company, it comes with a loan portfolio with question marks around it," said Chris Allen, senior analyst with Evercore Partners.
Citadel's letter brings a new protagonist to drive change in the company, Allen said, but whether that can translate into shareholder value still remains to be seen.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.60%||3.68%|
|15 yr fixed||2.73%||2.79%|
|30 yr refi||3.64%||3.72%|
|15 yr refi||2.77%||2.82%|
Today's featured rates: