The core of the global technology industry was hit by the precipitous fall in the shares of Silicon Valley Bank (SVB): he Thursday they lost 60% its shares and its capitalization were cut by two thirds, while this Friday the shares are already losing 45% in pre-market before opening the bag.
SVB had to go out and sell part of its portfolio at a low price, incurring losses of 1.8 billion dollars. Venture capital managers such as the fund Founders Fund and other managers They asked the investee companies to withdraw the money from the entity.
The bank tries on Friday to appeal to the calm of the clients, but the dynamics of the premarket indicate that it is not succeeding. SVB seeks to assure its venture capital clients that sYour money is safe.
SVB CEO, Gregory Becker, has been calling customers to reassure them that their money with the bank is safe, according to two people familiar with the matter.
SVB’s problems erupted when the loss of depositors forced the firm to sell a portfolio of 21,000 million dollars at a loss to obtain liquidity. Now you must too increase capitalbut as the problems accumulate, the risk of outflow of funds skyrockets and the entity’s prospects for continuing to operate without foreign aid are reduced.
The fall of SVB comes a day after the collapse of another bank, Silvergatefor their exposure to crypto.
SVB is an entity focused precisely on company deposits, which has caused the cost of its deposits to be above average. Its balance sheet had more than doubled in the past three years.
However, this bank is inserted in a sector that has had great losses in the last year, such as the technology companies that faced falls in their profits and turned to laying off staff to close their balance sheets.
The effects of the collapse of SVB
Among the main effects is the fall of other financial entities, given the deep relationship with which these companies coexist. First Republic Bankfrom San Francisco, fell 17%, Pac West Bancorp, based in Beverly Hills, dropped 25%. He Deutsche Bank loses 7%, the Santander Bank falls 5.32%, the same as the Dutch ENGand the Parisian BNP Paribas recedes 4%, a setback similar to that of the BBVA. In the same direction they moved the Bank of America (-6.2%), Wells Fargo (-6.2%), JPMorgan (-5.4%) and Citigroup (-4.1%).
Parallel World Stocks Hit Two-Month Lows: The World Stocks Index of MSCI down 0.6%reaching its lowest level since mid-Januarywhile the pan-European STOXX 600 subtracts 1.6%. All global stock exchanges they reflect losses of up to 3%, with the exception of 4: the S&P Lima, the Mexican S&P BMV IPC, the Israeli TA 35 and the Saudi Tadawul All Share (TASI). He dax german loses 1.5%, while the IBEX 35 Spanish falls 1.7% and ACC 40 French 1.4%.
The Americans also share the falls with the Dow Jones with a drop of -1.7%, the S$P 500 with -1.9% and the Nasdaq (-2.1%).
Cryptocurrencies also echo the collapse of SVB although they are also impacted by other factors, such as the possible rise in rates. Crypto face falls of up to 12%. He Bitcoin it loses almost 9.5% in the last 24 hours and falls to US$19,724, its lowest value since January 12 and its biggest daily drop since February 15. For his part, ethereum it falls more than 10% and operates at u$s1,376. The falls lead her Dogecoin (-11.8%), Ethereum, Bitcoin, Polygon (-9%) and Binance (-7.3%).
Source: Ambito
