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SVB FinancialIt is the parent company of Silicon Valley Bank.
Attempts by the bank to raise funds have failed, sources said, and the bank has hired advisers to explore a potential sale.
Large financial institutions are considering potential purchases of SVB. But deposit outflows have so far outpaced the sale process, making it very difficult to give a realistic assessment of the bank by potential buyers, sources told Faber. .
The bank’s shares fell 60% on Thursday after SVB announced plans to raise more than $2 billion in capital on Wednesday night. The stock was halted due to pending news after falling another 60% in premarket trading on Friday. The stock was not opened for trading with the rest of the market at 9:30 am ET and was still stalled.
under the conditions of plan The SVB, announced Wednesday, had sought to sell $1.25 billion of common stock and an additional $500 million of convertible preferred stock.
SVB also announced an agreement with investment firm General Atlantic to sell $500 million of its common stock, but the deal was conditional on the termination of other common stock offerings. securities filing.
SVB, a leading bank of venture-backed firms, cited cash burns from customers as one of the reasons it considered additional funding.
But rising interest rates, recession fears and a slowdown in the initial public offering market are making it harder for early-stage companies to raise more cash. This seems to have prompted companies to lower their deposits at banks such as his SVB.
Wall Street analysts said Thursday and Friday that the SVB problem is unlikely to spread throughout the banking system. In a memo to clients, Morgan Stanley said the SVB problem was “very idiosyncratic.”
Also on Wednesday, the SVB said it would sell $21 billion worth of securities to raise cash and reposition its balance sheet toward short-duration assets that are less susceptible to rising interest rates. SVB estimates that the sale cost him $1.8 billion.