Concerning , especially with the firm refusing to address questions about the SEC filing.
The high interest rate environment and the held to maturity unrealized losses are continuing to deteriorate the balance sheet and stock price.
The question is how long can the balance sheet resist without a further dilution in value, or an acquisition by a better capitalized player or a government bailout.
https://www.reuters.com/business/finance/charles-schwab-raise-25-bln-long-term-debt-wsj-2023-05-17/
I'm an admin to an MD on the HR side and I've asked some questions around layoffs because it keeps coming up in conversations. Was told while there are no immediate plans for layoffs it's probably coming next year at some point. The feeling is that Schwab sees a prolonged pullback in spending and will use this downturn as a chance to eliminate duplicative roles for blue and green overlap and get rid of higher salaries.
$2.5B in cash can be used for a lot of things - but if we want to go the route of layoffs, paying off everyone’s severance is going to be very expensive. Assuming the worst case scenario, let’s say 7,000 employees get laid off and each gets an average severance package of $200K (not inconceivable given high salaries, COBRA, and accrued PTO payouts), that would be a one time cost of $1.4B. Their refusal to answer questions about the funds only adds to the speculation.
@ 2vux+1mGM653q: if it’s not a big deal, why be so secretive about it? There isn’t anything to hide right?
They have 3.7B in bonds by expiring end of 2024. So they borrowed 2.5B which by end of 2024 means their bond borrowing will be 1.2B less than now. And I'd bet they are callable, so they can call them back at anytime and issue new bonds with a lower yield. Not a big deal
Schwab was never great. Had a chance to be when they acquired TDA but squandered that away. Karma. Would be awesome for Blackrock to acquire them.
Blackrock
Why is the firm so secretive about all of this with their employees? Feels like we are always the last to know the bottom line these days.
Amazing how fast a great company can turn south, both internally with it's culture and in terms of performance