Shares of Silicon Valley Bank tumbled as the unrest unfolded


Silicon stock Valley Bank fell sharply on Thursday after the company said it would raise additional capital by selling shares, supporting a shift in its asset portfolio to higher-yielding assets and extending its borrowings.

Given the recent bank carnage in the tech and technology worlds, the market fears that all is not well with SVB. The company’s chief executive, Greg Becker, said when he spoke to risky customers that their assets were safe, and the share sale was announced as an attempt to increase the bank’s flexibility, strength and financial profitability.

Becker said the bank has “enough liquidity” to support its clients, “with one exception: if everyone thinks SVB is in trouble, it will be difficult.” The executive told VC clients to “keep calm. This is my request. We have been supporting you there for 40 years, supporting portfolio companies, and supporting venture capitalists.

The bank’s share price is down more than 60% from a year ago.

In a presentation to investors about its various financial moves shared last night, the company noted that venture capitalists are underinvesting and startup clients are still burning through cash. The mismatch has led to what the company describes as pressure on its “cash flow balance”.

TechCrunch is hearing from some founders and investors that startups are being urged to consider funding from SVB due to health concerns; if many do, their actions could exacerbate the mismatch between deposits and withdrawals, possibly prolonging SVB pressure.

According to SVB’s mid-quarter update, the company graphically proved its low loan-to-deposit ratio at 43%. The degree of protection it can provide after the share price sell-off and its core client base will be known in the coming days.

TechCrunch has been actively reporting on the industry’s response to SVB’s news and sales, particularly on how startups choose to respond. Soon.

If you have a great tip or lead on events in the world of risk, you can contact Natasha Mascarenhas on Twitter @nmasc_ or +1 925 271 0912 Signal. Requests for anonymity will be honored.


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