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Cluster Buying By Insiders Of Charles Schwab – Insider Weekends

  • March 19, 2023

Following the collapse of Silicon Valley Bank, which we discussed in one of our Friday Wrap articles, regional bank stocks have seen a big drop in their stock prices along with a large increase in the number of insider purchases.

Our daily event-driven monitor provides updates on the various strategies that we follow, and when compiling a list of the insider purchases every evening, it was fascinating to see just how many were by insiders of regional banks.

This buying comes against a bleak background of various corporate jets parked in Omaha, Nebraska this weekend and the acquisition of Credit Suisse by UBS at firesafe prices in a deal engineered by the Swiss government and international regulators. As we mentioned before, insiders are often early and unfortunately run into burning buildings first.

The purchases that stood out the most last week was cluster buying by the insiders of Charles Schwab (SCHW), which  saw seven different insiders purchase shares – including the Co-Chairman and CEO. Charles Schwab has always been on radar for various reasons including the successful transition of the company from a broker-dealer to a wealth management firm and the frequent insider selling by founder Chuck Schwab.

The Charles Schwab Corporation is a financial services company with over $7.05 trillion in client assets, 33.8 million active brokerage accounts, and over 1.7 million banking accounts as of December 31, 2022. The company was originally a stock brokerage, but soon moved into wealth and investment management as well as banking services. They continued growing both organically and through their acquisition of TD Ameritrade, which was completed on October 6, 2020. The acquisition was a $26 billion all-stock stock deal, and as we mentioned in a Merger Arbitrage Mondays article, regulatory approval was a key risk for the deal. In addition to its securities broker-deal subsidiaries, Charles Schwab also has a banking subsidiary (Charles Schwab Bank) and an investment management subsidiary.

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