No wonder some of us (me very included) don't trust corporate releases- Silicone Valley Bank

[GON]

Silicone Valley Bank issued a new release today that they are raising more capital. Thier stocked plunged 68 percent. Of note, SVB is FDIC insured (you are personally backing their bank if you like it or not)

This is the statement from their CEO. No wonder some of us have zero money in equities. I know many here have made a killing in equities, but when I see a press release like this- I stay far away from equities. Whay can't the CEO just speak the clear truth. What he released is pure double talk, deception, and worthless to most anyone- yet we accept this practice as ok.

""While VC deployment has tracked our expectations, client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted. The related shift in our funding mix to more, higher-cost deposits and short-term borrowings, coupled with higher interest rates, continues to pressure NII and NIM," """CEO Greg Becker wrote in a letter to investors.

 

[wings&wheels]

Silicon....basically their VC business isn't returning as projected and they are being squeezed by paying higher rates.

"Pardon me stewardess, I speak corporate spin"

 

[PimTac]

Check out the chart. Click on ALL.

Shares of SVB Financial fall 60% as tech-focused bank looks to raise more cash

Trading in the stock was halted for volatility multiple times during the session after SVB announced plans to raise more than $2 billion of new capital.

www.cnbc.com

That is what is known as the Fickle Finger of Fate. No stock ever recovers from that.

 

[Slick3914]

What he is saying is 100% correct.

 

[wings&wheels]

...and having to sell held securities at a loss to maintain liquidity....ever tightening death spiral.

 

[PimTac]

It looks like SVB is deader than a can of corned beef.

 

[PimTac]

That was quick. They just announced that the bank has been shut down.

 

[Danh]

That was quick. They just announced that the bank has been shut down.

There was basically a classic run on the bank by depositors, so a shut down was the only option. It will probably be bought by one of the major banks and rehabilitated. In the meantime there’s always the FDIC.

We shouldn’t forget who financial press releases are aimed at: not the average investor but analysts working for brokerage firms and they understand the language. Equities have a very long record of delivering good returns if investors have the discipline to stay diversified and invest for the long term.

 

[Leo99]

Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.

All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.

 

[mattwithcats]

Silicon Valley Bank seized by FDIC in largest bank failure since 2008

The FDIC seized the bank’s assets in the middle of the business day, a sign of how dire the situation had become.

www.wavy.com

 

[PimTac]

Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.

All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.

The FDIC insures up to $250,000.

 

[97K15004WD]

16th largest bank

 

[BMWTurboDzl]

The FDIC insures up to $250,000.

Per account type. Total coverage per customer can easily be in excess of $1M

 

[wag123]

IMO this is a tangible sign that the country is headed into a recession.

 

[researcher]

This is all sounding familiar.. like a repeat of 2007-2008..

 

[wings&wheels]

Not sure this is a bellweather for a recession or other, major bank failures. SVB while large, has (had?) a relatively narrow business focus of the tech industry and, recently through acquisition, private banking and wealth management. The end goal was to tie in the growth business with the high net worth individual asset management and would have probably been a good play if done better. Won't know the gory details for some time but appears SVB got pinched between high rates, VC money not coming in, lower than planned deposits and holding excessive low interest assets which had to be sold en masse at a loss.

I don't understand the concentration in the low interest and apparently longer term assets, or why they were all held too long having to be liquidated at once instead of via a planned liquidation over time as interest rates crept up, spreading the losses on sale over time.

Good friend is a senior guy there, his business was acquired, he was on the 'good' side and not involved in these shenanigans but will probably be hurt by this......badly.

 

[wag123]

This is all sounding familiar.. like a repeat of 2007-2008..

The same thing happened in 1873, 1893, 1907, 1930, and the 1988 S&L crisis, all of which were followed by a recession or depression. History repeats itself.

 

[M56959]

Current topic regarding collapse.

Silicon Valley Bank (SVB) Collapses

FDIC took them over this morning: https://www.fdic.gov/news/press-releases/2023/pr23016.html This post on reddit sums up the situation pretty well: Answer: at an ELI5 level, Silicon Valley Bank (SVB) is a bank that focuses on providing services to startups and entrepreneurs. Many companies use...

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