Charles Schwab Corp. reiterated it’s not for sale after the company’s stock soared to a 52-week high Thursday as investors bet the discount stock brokerage pioneer would be swept up in a wave of industry takeovers.
Schwab’s shares surged 15 percent to $13.80 on the New York Stock Exchange before the San Francisco-based company issued a statement vowing to remain independent. After Schwab shot down the takeover talk, the company’s shares fell back to close Thursday at $12.68, a gain of 70 cents, or 5.8 percent.
“We have no interest in selling the company,” said Chairman Charles Schwab, the company’s founder, chief executive officer and largest shareholder.
It marked the second time in a year that Charles Schwab has rebuffed the notion that he wants to sell the company that he launched 34 years ago. He also declared his intention to remain independent last July, just a few days after returning to become the company’s CEO in a shake-up that ousted his longtime management partner, David Pottruck.
The most recent stock market chatter about a possible Schwab sale has been building since one of the brokerage’s biggest rivals, Ameritrade Holding Corp., reached an agreement two weeks ago to buy TD Waterhouse for $2.9 billion.
Meanwhile, another big competitor, E-Trade Financial Corp., remains on the takeover prowl after a bid to buy Ameritrade was rejected.
Online brokers are under pressure to consolidate to survive fierce price competition amid a downturn in customer activity since the heyday of dot-com stocks more than five years ago. Those dynamics have fed the perception that the long-slumping Schwab might also be ripe for a takeover, despite its founder’s resolve to remain independent.
Charles Schwab, who owns a 19 percent stake in the company, had a bad experience when he sold the brokerage to Bank of America for $57 million in 1983. Disillusioned with the way that deal worked out, Charles Schwab and other managers bought back the brokerage for $230 million in 1987.
The brokerage’s profits — and stock — ballooned through the bull market of the 1990s. But revenues drooped with dot-com bust, and Schwab still hasn’t fully recovered.
With the company’s stock well off its 1999 peak of $51.67, Charles Schwab has been trying to reverse the company’s fortunes by lowering prices and cutting expenses, continuing a streamlining that has shed more than 12,000 jobs while closing dozens of offices in the past four years.