• Silicon Valley Bank (SIVB) is reportedly seeking external acquisition after its efforts to raise over $2 billion in capital have failed.
• Shares in the bank were down 62% in pre-market trading on Friday, for which trading has now been halted.
• The bank’s stock plummeted 60% on Thursday after it announced a planned total raise worth $2.25 to “strengthen its financial position” and “reposition” its balance sheet.
Silicon Valley Bank Struggles
Silicon Valley Bank (SIVB) is reportedly seeking external acquisition after its efforts to raise over $2 billion in capital have failed. Shares in the bank were down 62% in pre-market trading on Friday, for which trading has now been halted. The U.S tech banking giant apparently has some potential buyers, though a deal is far from guaranteed.
Capital Raising Plans Fail
The bank’s stock plummeted 60% on Thursday after it announced a planned total raise worth $2.25 to “strengthen its financial position” and “reposition” its balance sheet. This included plans to sell $1.25 billion in common stock, $500 million of convertible preferred shares, and another $500 million common stock sale to General Atlantic (which was contingent on the success of the previous common stock sale). SVB also sold “substantially all” of its Available for Sale securities portfolio with the intention to reinvest the money, which it said would realize an earnings loss of $1.8 billion.
Seeking Potential Buyers
According to CNBC’s David Faber, Silicon Valley Bank has “hired advisors to seek a sale,” a result which is “not unexpected.” PayPal co-founder Peter Thiel’s Founders Fund advised companies yesterday to withdraw money from SBV over concerns surrounding their liquidity needs and SIVB’s ability “to pay out cash withdrawals promptly.” A deal is far from guaranteed as no details are available at this time about any potential buyers that may be interested in acquiring SIVB or what price they may be willing to pay for it but one thing is certain: SIVB needs help soon if it wants any chance of survival or stabilization after these losses and market pressures .
Impact On Customers
This news leaves customers uncertain if they will receive their deposits back or if they could potentially lose them if SIVB fails entirely before they can make any withdrawals; such an event would be disastrous for customers who rely heavily on their deposits with the bank–especially those who use it as part of their day-to-day business operations like payrolls or bill payments etc.. The future remains uncertain but customers should keep an eye out for further developments regarding this situation as more information becomes available over time as negotiations progress between SIVB and any potential buyers that may eventually come forward with offers .
Conclusion
SILICON VALLEY BANK IS IN TALKS TO SELL ITSELF AFTER FAILED CAPITAL RAISE! They have hired advisors seeking a sale but no details are known yet about potential buyers or prices; until then customers remain uncertain about how this news will affect them given that there’s potential risk involved here with deposits not being guaranteed if something goes wrong during negotiations or otherwise so caution should be taken when dealing with SILICON VALLEY BANK at this time until further updates become available!