- Previously, the counterparty announced an additional issue of shares in order to “strengthen the balance sheet”
- Against this background, rumors spread about the insolvency of the organization
- As a result, the share price of the parent company SVB fell by more than 60%.
- Now the bank is on the edge of the abyss, and customers are fleeing from it
At least five large venture capital funds have advised their portfolio organizations to redeem deposits in SVB. The bank is unsuccessfully trying to reassure investors after the share price of the parent company has fallen by more than 60%.
Among the organizations mentioned There is: Pantera Capital, Mechanism Capital, Eden Block and Founders Fund. Several other large venture capital investors have indicated that they will be closely monitoring developments.
The first signs of a coming banking panic?
Earlier this week, top management of Silicon Valley Bank announced an additional issue of shares for $1.75 billion, allegedly necessary in order to strengthen the bank’s balance sheet. The news caused a wave of disapproval from investors who accused SVB of being insolvent.
The CEO’s attempts to reassure investors only fueled the panic. As a result, on Thursday, March 9, the share price of SVB Financial Group, the bank’s parent company, fell by 60.41%.
The situation is also fueled by the fact that another major financial counterparty, Silvergate, recently announced liquidation. He dragged the entire market with him to the bottom, so venture investors prefer to play it safe.
But, what is most strange, against the backdrop of this news, several users declared about problems with access to accounts in SVB. This is a suspicious coincidence, especially since the bank’s management did not comment on the technical difficulties with authorization.