Billionaire brokerage founder Charles Schwab has seen his personal fortune plummet in the aftermath of Silicon Valley Banks collapse over the weekend.
According to the Bloomberg Billionaires Index, which monitors the real-time wealth of the richest people on earth, Schwab has personally lost around $3 billion in the wake of SVBs failure.
Schwab, who founded discount brokerage Charles Schwab Corp. in 1971, now has a net worth of $9.99 billion, according to Bloombergs estimates, making him the 183rd wealthiest person in the world.
The Bloomberg Billionaires Index shows that Schwabs fortune fell by 7.7% on Monday thanks to the brokerages tumbling share pricea personal loss of $828 million.
Since March 8, Schwab has had $3 billion wiped from his net worth, according to the publication. Since the beginning of 2023, he has lost almost $3.5 billionmeaning his wealth has fallen more than any other American billionaires this year.
Much of Schwabs fortune is derived from a stake in his eponymous company, where he serves as chairman.
Shares of Charles Schwab dropped almost 12% on Monday, as the collapse of SVB sparked a massive selloff of companies in the financial sector. At one point during Mondays trading session, shares were down more than 20%.
Investors have been particularly fearful that firms like Charles Schwab, which have large bond holdings with long maturities, might be forced to sell such assets at a loss to cover a rush of deposit withdrawalsthus falling into the same trap as Silicon Valley Bank.
SVB was forced to sell off its long-dated government bonds early as it did not have sufficient liquidity to cover a rise in customer deposit withdrawals. If the lender had been able to hold onto those bonds until they matured, it would have made its capital backbut selling them before the end of the maturity period meant offloading them at a loss, as increasing interest rates pushed their value down.
Reassurance from Schwab
Charles Schwab stock nosedived on Monday even in spite of reassurances from Schwab himself and the companys CEO, Walt Bettinger.
In a statement released on March 13, the pair sought to soothe clients and investors by defending its portfolio, assuring stakeholders that the firm remains a safe, secure, and strong financial institution.
Schwabs long-standing reputation as a safe port in a storm remains intact, driven by record-setting business performance, a conservative balance sheet, a strong liquidity position, and a diversified base of 34 million+ accountholders who invest with Schwab every day, Schwab and Bettinger said. As such, we remain confident in our approach and in our ability to help clients through all kinds of economic environments.
Charles Schwab shares were up by around 9% in pre-market trading on Tuesday.
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