Schwab's $660M Forge Global Buy: Just Another Brick in the Wall of Financial Elitism
Okay, so Schwab's dropping $660 million on Forge Global. Big deal. Another private shares platform getting swallowed up by the giants. Are we supposed to be impressed?
The Rich Get Richer, Shocker
Let's be real, this ain't about democratizing finance. It's about giving Schwab's high-net-worth clients another playground to gamble in. "The ability to transact in private company shares could help the firm better cater to productive registered investment advisors with high-net-worth clients who are increasing their exposure to the asset class." Translation: We're making it easier for rich people to get richer off companies that haven't even bothered to go public yet.
Meanwhile, the average Joe is stuck with whatever scraps are left on the public market.
High-net-worth individuals hold about 16% of their portfolios in alternative assets—roughly 900 basis points behind institutional investors. We envision a future in which 20%-25% of portfolio allocations to alternatives are commonplace for HNW investors. You know what I envision? A future where wealth inequality doesn't resemble a dystopian sci-fi movie. But hey, who am I kidding?
And speaking of sci-fi, have you seen the price of gas lately? I swear, it feels like they're charging extra just because they can.
Custodians of...What, Exactly?
Schwab needs to "develop capabilities that can provide product access and custody services." Custody services? Give me a break. It's not like they're guarding the Ark of the Covenant. They're shuffling digital assets around, collecting fees, and calling it "innovation." Are they even actually innovating, or just consolidating power?
Forge Global shares were up nearly 70% during intraday trading. Offcourse, they were. Insider trading? Probably not. But it definitely smells fishy.
A Drop in the Bucket...Of Inequality
$660 million is chump change for Schwab. "The $660 million deal represents just 0.4% of Schwab’s $170 billion intraday market cap." So basically, they found some spare change in the couch cushions and decided to buy a new toy. A toy that, let's be honest, 99% of us will never get to play with.
Is this a good move for Schwab? Maybe. Does it make the financial system any fairer? Hell no. The deal, valued at $660 million, is discussed further in Charles Schwab to buy private shares platform Forge Global in $660 million deal.
So, What's the Real Story?
It's the same old song and dance. The financial elite are building their walls higher, and we're all just supposed to sit here and clap. Ain't gonna happen.