Silicon Valley Bank Stock Plunges
• Silicon Valley Bank (SVB) shares plunge after the bank announces a stock offering of $1.75 billion and a separate purchase of $500 million common stock by private equity firm General Atlantic to shore up its balance sheet.
• Hedge funds, such as Peter Thiel’s Founders Fund and Pantera Capital, have recommended that portfolio firms remove their cash from the failing Silicon Valley Bank.
• Silvergate Bank’s failure has further complicated things for SVB as many cryptocurrency firms are now searching for new banking options.
Panic Among Traders
The announcement of Silicon Valley Bank’s financial difficulties triggered panic among traders, causing both stock and crypto markets to go into the red. The shares of SVB Financial Group, the parent business of Silicon Valley Bank, experienced a dramatic decrease in prices by more than 60%. On March 10 pre-market trading, it lost another 44%.
Hedge Funds Urge Investors To Withdraw
In response to this news, several venture capital investors in cryptocurrency have advised companies they sponsor to investigate opening multiple accounts and removing assets from Silicon Valley bank. Peter Thiel’s Founders Fund and Pantera Capital are two hedge funds that have recommended portfolio firms do so.
Cryptocurrency Firms Searching For New Banking Options
The failure of cryptocurrency-friendly Silvergate Bank earlier this week has made it difficult for SVB at a time when many cryptocurrency firms are looking for other banking choices. Many users have taken to Twitter with complaints about difficulty logging into their accounts with the bank. Despite being a popular choice among tech companies in the United States, these recent issues may cause customers to look elsewhere for banking services.
Silicon Valley Bank is facing increasing pressure due to failing stock prices and competition from other banks aimed at cryptocurrency customers. As venture capital investors urge companies they sponsor to move their assets away from SVB, customers may be left with little choice but to find alternate solutions for their banking needs in the near future.