The family of Todd Ricketts, Donald Trump’s pick as deputy secretary of commerce, has gained an estimated $700 million since election day, thanks to climbing shares of brokerage giant TD Ameritrade.
Rising interest rates, which can increase profit margins for brokerage firms, and hope for deregulation have helped boost TD Ameritrade 34% since Trump’s election. Shares of its competitors Charles Schwab, Interactive Brokers and E*Trade have all increased more than 14% over the same period. Analysts say TD Ameritrade’s rising stock does not have to do with the fact that Trump appointed Ricketts to be his deputy secretary of commerce. Instead TD Ameritrade has performed better than its competitors thanks to its well-timed $4 billion acquisition of Scottrade, which it announced 15 days before the election.
“At a time of rising rates, through this major acquisition, they are increasing their interest-sensitive balances significantly,” said Mac Sykes, an analyst at Gabelli & Company. “When they struck the deal, that outlook wasn’t fully incorporated. They will now benefit from the additional rate hikes given the interest-rate balances they’re taking on.”
Shares of TD Ameritrade jumped 10% the week after Trump won the White House, outperforming the overall market’s 2% increase, as investors planned for a new administration. TD Ameritrade stock hasn’t slowed down since. The company released its first quarter earnings on Wednesday, revealing record revenues. Shares had increased 0.89% Wednesday as of 1 p.m.
“It was a quarter of significant change,” said TD Ameritrade CEO Tim Hockey in a statement. “We announced plans to acquire Scottrade – the largest transaction in our history. The Federal Reserve raised interest rates for the first time in 12 months, and we witnessed an historic election, the outcome of which brought retail investors back to the markets.”
Todd Ricketts’ father J. Joe founded TD Ameritrade and owns 7% of the company today. He and his family, which also own the Chicago Cubs, are worth an estimated $5.6 billion. J. Joe and his wife Marlene initially funneled more than $5 million into an anti-Trump super PAC in the first three months of 2016. The president-elect responded to the Ricketts’ donations with a threat.
I hear the Rickets family, who own the Chicago Cubs, are secretly spending $'s against me. They better be careful, they have a lot to hide!
— Donald J. Trump (@realDonaldTrump) February 22, 2016
In September, after Donald Trump had secured the Republican nomination, J. Joe Ricketts changed course and reportedly donated at least $1 million to support the president-elect. That made him one of Trump’s few billionaire supporters during the campaign, along with Sheldon Adelson, Peter Thiel, Harold Hamm and Carl Icahn, who Trump named his special advisor on regulatory reform in December.
Ricketts’ support seems to have paid off. His son Todd, who sits on the board of directors at TD Ameritrade, was one of the first people Trump nominated for his team. If confirmed by the Senate, Todd Ricketts will serve under Trump’s Secretary of Commerce pick Wilbur Ross, the private equity titan worth an estimated $2.5 billion. Ross appeared before a U.S. Senate committee for his nomination hearing on Wednesday at 10 a.m.
