Holy cow. And yesterday a Crypto bank went under. Is something afoot here?
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This is a bit worrying honestly, and tomorrow will be an… interesting day.
Concurrent with the equity issuance, the company announced that it had sold basically all of its $21 billion available for sale investment portfolio and incurred a $1.8 billion loss, which dented both tier 1 capital and book equity by over 10%. This equity issuance plugs the holes that loss created. That the company felt it had to absorb such a staggering loss suggests two possibilities to me. Either deposits from the company’s largely venture backed customers are dropping much faster than the company led on in its first quarter conference call or the company is worried about losses in the loan portfolio. It could also be a mix of the two.
More on Seeking Alpha: SVB Financial: Blew Up Even Faster Than I Expected (SIVB) | Seeking Alpha
…Shares of SVB, whose operating segments include Silicon Valley Bank, slumped over 50% in their deepest one-day drop on record after the company announced a $1.75 billion share sale late on Wednesday. SVB is battling cash burn due to declining deposits from startups struggling with a venture capital funding drought…
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Good catch Dave. Are we about to witness the birth of a bunch of Zombies soon?
Are we about to witness the birth of a bunch of Zombies soon?
but, but, but… “low cost of capital” What could go wrong?
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This is interesting. About two weeks from now I need money in Coinbase to initiate my getting an Opensea API key.
These events happening now will give me a heads up about Coinbase. I have nothing there now. If it is unscathed ten to twelve days from now I will go forward. I am talking $250. The bigger issue is having the money sitting there unfailingly for Opensea.
Trading halted in before hours trading? It’s down another 60% before market open. Wow.