SVB Bank’s $2.25 Billion Stock Offering Causes Market Panic
• Silicon Valley Bank (SVB) has seen a dramatic decrease in its shares due to a stock offering of $1.75 billion and the purchase of $500 million common stock by private equity firm General Atlantic.
• Many cryptocurrency-focused venture capital investors, such as Peter Thiel’s Founders Fund, have advised their portfolio companies to withdraw cash from SVB.
• The bank is now facing difficulties as cryptocurrency firms are looking for other banking choices following the failure of Silvergate Bank earlier this week.
Silicon Valley Bank Stock Plunges
Silicon Valley Bank (SVB) has seen its shares plunge by more than 60% after announcing a stock offering of $1.75 billion and the purchase of $500 million common stock by private equity firm General Atlantic earlier this week.
Crypto-Focused Venture Capital Investors Urge Firms To Withdraw Cash
In response to the announcement, many cryptocurrency-focused venture capital investors, such as Peter Thiel’s Founders Fund, have advised their portfolio companies to withdraw cash from SVB in order to protect their assets. Pantera Capital, both a hedge fund and a venture investor, has also urged its portfolio companies to investigate the possibility of opening several accounts at different banks or institutions.
Difficulties Arise For Cryptocurrency Firms
The failure of Silvergate Bank earlier this week has left many cryptocurrency firms scrambling for alternative banking options. This comes at an already difficult time for SVB which is struggling with numerous problems including difficulty logging into accounts reported by multiple users on Twitter.
SVB – Go-To Choice For Tech Businesses
With over 2,600 customers in the financial technology industry alone, Silicon Valley Bank is typically the go-to choice for many venture-backed technology businesses located in the United States. However due to recent events it seems that these customers may need to look elsewhere for financial services and support going forward.
The future of Silicon Valley Bank remains uncertain and only time will tell how much further stock prices will drop before it can recover from this shocking drop in value caused primarily by its own actions. In the meantime crypto firms should be doing all they can to secure alternative banking solutions and protect their assets while waiting out what could be an uncertain future ahead for SVB Financial Group