Talk to Chuck
A life well-invested
Good morning, profit pursuers. This is your Stock Market Rundown for August 25, 2023. Thank you as always for reading. Let’s get into it:
TODAY’S TOP STORY: DISCOUNT BROKER ON A DIET 💸
Brokerage firm Charles Schwab used to have the advertising slogan “talk to Chuck”, based on the nickname of founder Charles “Chuck” Schwab. But if you tried chatting with Chuck today he might be surly enough to give you the finger.
Schwab is incurring millions in charges due to painful cost-cutting. Why the drama? Well, with rates rising, clients are chasing yield, which equals moving cash out of their Schwab accounts, which equals sagging profits for Schwab.
So, Schwab’s management team is putting their expenses on a diet stricter than a Victoria’s Secret model before fashion week—shrinking corporate office space and trimming headcount.
It’s a big comedown for behemoth brokerage Schwab, which was founded by Charles “Chuck” Schwab in 1971. Schwab was a nimble predator among lumbering dinosaurs: he grabbed clients by cutting his fees to half of what incumbents charged. While competitors fumed, Schwab’s business exploded.
Fast forward to today: The Charles Schwab Corporation is the largest publicly-traded US brokerage firm and, despite the stock slump, still enjoys a $100 -billion-plus market cap. And Chuck himself is still co-chairman.
Kind of poignant that, as an octogenarian billionaire, he’s still dealing with the hassles of work life just like us regular schmucks. Though, I’m guessing nobody ever expects him to change a printer toner cartridge.
SO WHAT ELSE IS GOING ON?
Zoom reported a decent quarter with earnings beating expectations. Privacy concerns with Zoom’s products have faded, as it turns out nobody cares if the Chinese government is spying on our video calls with Amanda in HR to discuss our dental coverage.
Software bug? GM’s robotaxi arm, Cruise, has to take half its self-driving cars off the road in San Francisco after one of their driverless vehicles hit a fire truck on its way to an emergency scene. Try turning it off and on again.
Alert the boys on the Wall Street Bets subreddit: Coinbase just got approval to offer crypto futures trading to retail investors. Three things are certain in this life: death, taxes, and levered crypto speculators blowing themselves up.
La-Z-Boy reported earnings that beat estimates and positive same-store sales. Just in time for football season, when half the population will settle into their comfy La-Z-Boy recliner for ten straight hours on Sunday. Can you get me a beer from the fridge while you’re up?
That’s it for this week, pals; have yourself a terrific weekend and I’ll see you back here Monday. Yours in capitalism, The Axe