Charles Schwab, who founded the investment brokerage that shares his name, has lost $2.9 billion since March 8 and the collapse of Silicon Valley Bank, according to Bloomberg.
Most of the 85-year-old’s wealth comes from a 6% stake in the brokerage that he founded in 1971, styled as a brokerage for people looking for discount prices. Schwab stepped down as CEO in 2008 but still serves as chairman of the board.
Related: Signature Bank Shuts Down After Billion-Dollar Bank Run
Silicon Valley Bank, (SVB) a California-based bank focused on startups, disclosed an enormous loss last week after a crypto-focused bank, Silvergate Capital, closed.
This set off a wave of panic in the banking industry, first with a severe drop in regional banks’ stock prices, and then a bank run at SVB, as founders rushed to recover deposits. Signature Bank also said it faced a run on its customer balances, leading the government to take over both and promise to guarantee customer deposits.
Still, the Dow shot up 400 points on Tuesday after the Consumer Price Index showed inflation cooled off in February. Regional bank stocks rallied as well.
Regardless, as Bloomberg noted, Charles Schwab’s stock dropped 32% since the end of the day Wednesday. The value of a publicly traded company is based on the price of its outstanding shares. As such, a dramatic stock rout can pull down the value of a company and the value of shares people like Schwab hold in it.
Thus, based on his stake in the company, the outlet calculated, Schwab has lost $2.9 billion since Wednesday last week. This is the largest drop he has faced since landing on the outlet’s Billionaire’s Index 10 years prior.
The brokerage was also a target, as Bloomberg noted because they have similar investment portfolios, however, the brokerage’s assets are insured, unlike SVB, the outlet added.
Read More
As Silicon Valley Bank collapsed recently, the net worth of billionaire Charles Schwab took a major hit. According to a Monday report, the renowned businessman has lost roughly $3 billion of his personal wealth as a result of the fallout.
Schwab’s fortunes rose to peak over the past couple of years due in part to his investments in the tech industry. However, those gains have been lost as recently bad news about Silicon Valley Bank poured in. The bank, one of the the largest on the West Coast, found itself in a state of panic after it was revealed that their loans were in default. This sent shock waves throughout the investment community that was tied to the bank and dealt a fatal blow to Charles Schwab’s personal wealth.
Schwab is not alone in his losses from the Silicon Valley Bank disaster. Many other businesses and individuals have seen billions evaporate from their accounts as the bank’s investment holdings plummeted in value. Even smaller investors have felt the sting, with many watching the news of the bank’s failure with sadness and dread.
As of Monday, the total losses suffered by Charles Schwab are estimated to be $3 billion. While this is certainly a sizeable sum of money, it is still only a fraction of Schwab’s net worth. He still remains one of the wealthiest men in the world, having amassed a fortune estimated to be in excess of $6 billion.
Schwab is no stranger to risk and likely is not worried about the losses he is facing. With an experienced team of advisors and decades of investment experience under his belt, Schwab has the financial savvy to quickly navigate through the current market and find solutions to his current financial situation.
Despite the recent losses, Charles Schwab is no doubt already looking forward the next challenge. It is through his willingness to take risks that Schwab is able to remain a competitive force in the world of investment and finance. Even with the losses from the Silicon Valley Bank collapse, . Schwab remains one of the wealthiest of individuals and as always, a leader in the business world.
