Silicon Valley Bank shares plunged 60 per cent on Thursday, a day after launching a $2.25bn stock sale to shore up its balance sheet as it grapples with declining deposits from technology start-ups.
Shares of SVB Financial Group, Silicon Valley Bank's parent company, registered their biggest decline on record, wiping $9.6bn from the banking group's market capitalisation, after it admitted large losses on the sale of securities as it attempted to raise cash.
The decline sparked contagion among financial stocks more broadly, drawing attention to the potential effect that rising interest rates could have on net interest income at other banks. The four biggest US banks JPMorgan, Citigroup, Wells Fargo and Bank of America lost $52.4bn of market value in Thursday trading. SVB, the banking partner for half of US venture-backed tech and life sciences companies, has suffered from a slowdown in venture capital funding, as well as cash burn at many of its clients and losses on investments it made when rates were at rock-bottom levels.
Silicon Valley Bank stock jumping off a cliff today as one of the largest lenders for early-stage tech begins a fire sale of stock to shore up cash reserves.
— Peruvian Bull (@peruvian_bull) March 9, 2023
Trouble in Paradise...https://t.co/TIFDLsSLVk pic.twitter.com/Mzcz585bQZ
PETER THIEL’S FOUNDERS FUND ADVISES COMPANIES TO WITHDRAW MONEY FROM SILICON VALLEY BANK - Bloomberg$SIVB -60.4% today, and another -17% after hours
— Dylan LeClair 🟠 (@DylanLeClair_) March 9, 2023
$169b in deposits, we got ourselves a bank run
Some VC firms are encouraging their portfolio companies to pull funds out of Silicon Valley Bank while others are advising startups to keep no more than $250K (@erinkwoo / The Information)https://t.co/tpq7R9SEWJhttps://t.co/rUTCxGvhhu
— Techmeme (@Techmeme) March 9, 2023
Silicon Valley Bank’s CEO dumped a lot of stock last week. Interesting. pic.twitter.com/5T73IgefTW
— Paddy Cosgrave (@paddycosgrave) March 9, 2023