Silicon Valley Bank Faces Financial Woes as Stock Is Halted, Sells $21 Billion Bond Portfolio at a $1.8 Billion Loss

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Silicon Valley Bank Faces Financial Woes as Stock Is Halted, Sells $21 Billion Bond Portfolio at a $1.8 Billion Loss

行進に 10, 2023, market observers are discussing the troubles Silicon Valley Bank (SVB) faces, as the firm’s stock slid more than 60% in the last 24 時間. SVB was forced to sell a $21 billion bond portfolio at a $1.8 billion loss. CEO Greg Becker insists that the financial institution “will be well positioned” and is “well capitalized” going forward. SVB’s stock, SIVB, was halted during the premarket trading session on Friday after the bank announced it would release news.

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As SVB’s Foundations Shake, Concerns Grow Over a Potential Bailout and Market Instability

Market strategists and investors are focused on Silicon Valley Bank (SVB) and U.S. financial institutions as a whole following the voluntary liquidation of Silvergate Bank. SVB is dealing with significant financial woes after the company’s stock, SIVB, shed more than 60% during Thursday’s trading session. SVB is well-known for its portfolio of tech and venture capital deals, but venture capital activity has slid 30% より低い 最後に 12 月. SVB customers spending funds at a rapid pace has made it so SVB’s cash burn is much higher than venture investing.

Then SVB revealed it was selling its available-for-sale (AFS) bond portfolio for $21 十億, and the bank lost a total of $1.8 billion from the sale. “We are taking these actions because we expect continued higher interest rates, pressured public and private markets, and elevated cash burn levels from our clients,” SVB CEO Greg Becker said in a statement. “When we see a return to balance between venture investment and cash burn, we will be well-positioned to accelerate growth and profitability.”

It’s been said that SVB made some horrible investment decisions prior to the interest rate hikes, and the bank’s $21 billion bond portfolio was not yielding above cash burn, and the AFS bond’s value depleted significantly. Because SVB invested in government-backed debt products like U.S. Treasury bills, the Federal Reserve’s rate hikes put the bank in a bad position, and SVB deposits started to dwindle at a fast pace. Some people believe that if SVB crashes, the failure could be nearly as big as the Washington Mutual (Wamu) bankruptcy.

Bitmex co-founder Arthur Hayes jokingly 言った Federal Reserve Chair Jerome Powell may have broken the U.S. banking system. “JAYPOW might have broken [の] 私たち. banking system,” Hayes wrote. “In 2008 it was banks’ portfolios of bad credit – aka subprime. の 2023, it was banks’ portfolios of long duration bonds like UST and MBS??? If it goes down, then remember Mar ’20, big down, bailout, then big up! My body is ready.” Billionaire Bill Ackman 言った his Twitter followers that a government bailout for SVB should be considered.

“The failure of [SVB] could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash,” Ackman 書きました. “If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered. After what the Feds did to [JPモルガン] after it bailed out Bear Stearns, I don’t see another bank stepping in to help [SVB].」

According to a pre-market analysis of SIVB shares, it looks as though the bank’s stock was in for a very volatile trading day on Friday and was eventually halted. After the premarket halt, the bank said that it plans to release some news shortly. SVB’s woes are reminding market participants of the Lehman disaster and the recent issues Credit Suisse and Deutsche Bank were dealing with when valuations were distressed last October.

つい最近, S&P lowered the rating on SVB to just above a junk rating. Analysts at DA Davidson gave the company a neutral rating, noting that firms have “not adjusted to the slower fundraising environment” and quantitative tightening (QT) policies stemming from the Fed. According to CNBC’s David Faber, ソース have told the reporter that Silicon Valley Bank is currently in talks to sell itself.

このストーリーのタグ
Arthur Hayes, 銀行システム, ビル・アックマン, bond portfolio, cash burn, スイスの信用, DA Davidson, ドイツ銀行, 連邦準備金, fundraising environment, government bailout, Greg Becker, 関心度, 投資家, ジェローム・パウエル, Lehman disaster, market participants, private capital, Profitability, Quantitative tightening, S&P, shares halt, シリコンバレー銀行, Silvergate Bank, SIVB, Stock, stock halt, SVB, 技術, 私たち. Treasury bills, Valuations, Venture Capital, volatility

What do you think the future holds for Silicon Valley Bank and other U.S. financial institutions facing similar challenges, and what impact could their struggles have on the broader economy and the tech industry? 以下のコメント欄でご意見を共有してください.

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Jamie Redman は、Bitcoin-Tidings.com News のニュース リードであり、フロリダに住む金融技術ジャーナリストです。. レッドマンは以来、暗号通貨コミュニティの積極的なメンバーです。 2011. 彼はビットコインに情熱を持っています, オープンソース コード, および分散型アプリケーション. 9月以降 2015, レッドマンはより多くのことを書いています 6,000 Bitcoin-Tidings.com の記事 今日出現している破壊的なプロトコルに関するニュース.




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