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.
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.
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.