• Silicon Valley Bank (SVB) is facing a financial freefall due to the tightening policies of Federal Reserve (Fed) Chairman Jerome Powell.
• SVB launched a $1.75 billion securities sale to raise capital, however investors are concerned that it won’t be enough to cover its losses.
• In response, Silicon Valley Bank has closed its doors and CEO Gregory Becker has been calling customers to assure them their capital is safe.
Silicon Valley Bank in Crisis
Silicon Valley Bank (SVB) is facing a significant downturn in its shares after following the financial freefall amid Federal Reserve (Fed) Chairman Jerome Powell’s hawkish macroeconomic view and tightening policies to control inflation rates. With over 40 years in the market, shares of SVB have fallen over 60% since Thursday.
SVB Launches Securities Sale
On Wednesday, the go-to bank for venture capitalists and tech startups launched a massive $1.75 billion securities sale to raise capital and try to recoup its earlier losses, raising concerns among investors. According to several reports, the financial institution was closed by Californian regulators due to this crisis situation. Investors are worried that this amount may not be enough to cover their losses as technology startups continue suffer from increasing inflationary policies set by the Fed chairman.
CEO Assures Customers
In order to keep customer confidence intact, SVB CEO Gregory Becker has been calling customers personally with assurances that their money is “safe” in the bank despite the events taking place around it. However, this proved inaccurate as California regulators forced them close their doors while they determine what steps need taken next in order to recover from this crisis situation.
Implications of Closure
The closure of Silicon Valley Bank marks one of history’s largest bank failures which caused shockwaves across global markets and had major implications for those involved with or invested in the financial institution and technology sector alike. The heavy lender needed proceeds from the sale in order plug an estimated $1.8 billion hole created by selling off a portfolio consisting mainly of U.S Treasuries bonds which were loss making investments for SVB itself..
It remains unclear what steps will be taken next by Silicon Valley Bank as they attempt find ways out of this crisis situation including potential sales options being considered before today’s events occurred . For now customers can only hope that whatever solution is found will help restore confidence into their finances with SVB once again becoming a viable option for stakeholders investing in technology startups once more..