What happened
Charles Schwab (SCHW 1.31%) saw its share price fall on Friday, as it was down about 7.4% as of 12:30 p.m. ET. The stock was trading at around $61.40 per share, down about 26.3% year to date, as of March 10 at 12:30 p.m. EST.
The major indexes were all down on Friday, as the S&P 500 was off 29 points (-0.7%), and the Dow Jones Industrial Average was down 153 points (0.5%), while the Nasdaq Composite was down 85 points (-0.8%).
So what
The financial services giant sank lower Friday after news emerged Thursday of a potential block sell-off of 8.5 million shares of Schwab stock, run through JPMorgan Chase. Reports did not indicate who the seller was, but block trades are done by institutional investors. The reports indicated the sale price was $73 to $74 per share, just below the price at Wednesday's close of $76 per share.
The news of the potential sale sent Schwab's price lower on Thursday by about 16% to $65.45. The sell-off continued Friday, exacerbated by woes within the financial sector related to the massive sell-off stemming from the failure of Silicon Valley Bank, owned by SVB Financial, which had a run on deposits and was shut down by the Federal Deposit Insurance Corp. (FDIC).
As for Schwab, several analysts called the sell-off related to the reported block sale overblown.
Now what
Morgan Stanley analyst Michael Cyprys issued a research note Friday saying the Schwab sell-off was overdone, and he maintained his overweight rating and $99 price target.
JPMorgan Chase analyst Kenneth Worthington lowered the price target for Schwab to $97 but kept his overweight rating, saying the sell-off created a "compelling entry point" for investors.
It has certainly been a volatile week for bank and financial stocks, but Schwab is pretty sturdy as one of the behemoths in the sector. But keep an eye out for more news related to this block sale.
Also, the firm will release its monthly activity report for February next Tuesday, which details monthly assets, client accounts, and other activities and accounts. There could be some nuggets of information there.
