Charles Schwab (NYSE: SCHW) saw its stock price fall on Thursday due to events outside the company’s control. That’s because the biggest news for the brokerage was that a major shareholder sold a chunk of his Schwab stock at a discount.
Schwab’s stock price fell in sympathy. At the end of the trading session, the company’s shares had lost 0.5% of their value. That was favorable, but just, compared to the S&P 500 index fell 0.8% on the day.
Real estate for sale, cheap
As part of its fiscal third quarter 2024 earnings report, Canada-based Toronto-Dominion Bank (NYSE: TD) announced it was selling 40.5 million shares of Schwab common stock. It made about $2.5 billion on the sale, bringing the average share price to $61.73. That’s down significantly from the brokerage’s most recent closing price of $64.27 per share.
The move was part of an effort to shore up the lender’s finances. For the quarter, it booked a provision of CAD$2.6 billion ($1.9 billion) to pay fines expected to be levied by the U.S. Department of Justice (DoJ), which is currently investigating the bank’s anti-money laundering (AML) efforts.
The share sale reduces Toronto-Dominion’s stake in Schwab to just over 10%. Before the divestment, that figure was 12.3%.
Already not in the market’s favor
While extenuating circumstances were the driving force behind the Toronto-Dominion divestment, investors have generally been cold toward Schwab of late. Earlier this summer, the company said it was downsizing its banking operations, and some market participants weren’t too happy about that strategy. Meanwhile, second-quarter earnings showed a net income figure that barely budged from the year-ago figure.
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Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has positions in Charles Schwab. The Motley Fool has positions in and recommends Charles Schwab. The Motley Fool recommends the following options: short September 2024 $77.50 calls on Charles Schwab. The Motley Fool has a disclosure policy.
Why Charles Schwab Stock Took a Hit on Thursday was originally published by The Motley Fool
