Sillicon Valley Bank!
Understand what led to the Collapse of the 16th largest bank in America!
A detailed thread below ⬇️🧵
#SVBCollapse #investing
Understand what led to the Collapse of the 16th largest bank in America!
A detailed thread below ⬇️🧵
#SVBCollapse #investing
(1/11)
About SVB:
Silicon Valley Bank (SVB) was founded in 1983 and was the 16th largest bank in America. The bank had $209B in assets and around $175B in deposits as of December 2022.
About SVB:
Silicon Valley Bank (SVB) was founded in 1983 and was the 16th largest bank in America. The bank had $209B in assets and around $175B in deposits as of December 2022.
(2/11)
• On Wednesday, March 8th, SVB announced that it needed to raise $2.25B & offered $1.25B of its common stock & $500M of its convertible preferred shares.
Due to startup clients withdrawing deposits in an attempt to keep their companies buoyant, the bank had been…..
• On Wednesday, March 8th, SVB announced that it needed to raise $2.25B & offered $1.25B of its common stock & $500M of its convertible preferred shares.
Due to startup clients withdrawing deposits in an attempt to keep their companies buoyant, the bank had been…..
(3/11)
• continued⬇️
forced to sell all of its bonds for a loss of $1.8B.
• March 9th saw SVB shares fall by 41% as it announced that it had sold all of its available-for-sale securities.
• continued⬇️
forced to sell all of its bonds for a loss of $1.8B.
• March 9th saw SVB shares fall by 41% as it announced that it had sold all of its available-for-sale securities.
(4/11)
• By the end of the day, depositors had withdrawn a total of $42B which led to the a negative cash balance of $958M.
• On March 10th, venture capital firms like Coatue & Union Square Ventures started emailing their portfolio businesses to withdraw their deposits.
• By the end of the day, depositors had withdrawn a total of $42B which led to the a negative cash balance of $958M.
• On March 10th, venture capital firms like Coatue & Union Square Ventures started emailing their portfolio businesses to withdraw their deposits.
(5/11)
• Added panic through social media led to a bank run.
SVB shut and The Federal Deposit Insurance Corporation was appointed as the receiver. SVB shares had seen a sharp fall of 66% in premarket trading
• Added panic through social media led to a bank run.
SVB shut and The Federal Deposit Insurance Corporation was appointed as the receiver. SVB shares had seen a sharp fall of 66% in premarket trading
(6/11)
• Insured depositors were promised that their deposits would become available on the 13th of March, however a large number of deposits remain uninsured and their future, uncertain.
• Insured depositors were promised that their deposits would become available on the 13th of March, however a large number of deposits remain uninsured and their future, uncertain.
(7/11)
• On 13th March, SVB’s UK arm was sold to HSBC for 1 pound and the transaction was facilitated by the Bank of England. The deal assured depositors that their deposits are protected since UK has a lot of SVB customers. HSBC’s shares fell by 3.5%
• On 13th March, SVB’s UK arm was sold to HSBC for 1 pound and the transaction was facilitated by the Bank of England. The deal assured depositors that their deposits are protected since UK has a lot of SVB customers. HSBC’s shares fell by 3.5%
(8/11)
• Over 400+ VC firms have shown their support to SVB by expressing that, “The events that unfolded over the past 48 hours have been deeply disappointing and concerning.
• Over 400+ VC firms have shown their support to SVB by expressing that, “The events that unfolded over the past 48 hours have been deeply disappointing and concerning.
(9/11)
• In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”
• In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”
(10/11)
• Amid crisis, US regulatory agencies shut down New York based Signature Bank on Sunday, 12th of March in an attempt to prevent spreading the crisis
• Amid crisis, US regulatory agencies shut down New York based Signature Bank on Sunday, 12th of March in an attempt to prevent spreading the crisis
(11/11)
• The market has reacted strongly to this fiasco.
World market is set for aftershocks as SVB collapse ripples out!
End of thread 🧵
• The market has reacted strongly to this fiasco.
World market is set for aftershocks as SVB collapse ripples out!
End of thread 🧵
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