As we come into the close of the week, the situation looks even more dire for the troubled SVB Financial group, and it looks like it could leading to a complete selloff. Later in the week, SVB shared concerns that other financial institutions may also be in trouble due to high interest rates on bonds. This saw the stock price fall 60 percent after a major fall earlier just a few days ago. Now, after allegedly failing to gain funding, SVB Financial may be looking to sell itself.
Word of SVB’s possible plans to selloff completely come via CNBC, who spoke with sources familiar on the matter. Reportedly, SVB Financial CEO Greg Becker held a call with clients and investors late on Thursday to attempt to calm concerns about the company. This apparently included weighing in on the entire banking sector and sharing concern that more banks than just SVB would suffer major losses in bond portfolios. Reportedly, SVB’s attempt to raise the over $2 billion in capital it was looking for have failed and now the company is engaging in talks to sell itself off.
SVB Financial is a major backer behind a multitude of tech startups, but the company has found heightened bond interest rates to be a major issue. Leadership at SVB also cited higher client cash burn as a major contributing factor to its current cash woes. The company was only able to secure funding from equity fund and client General Atlantic, which committed to $500 million in investment, but its seems this won’t be enough to cover SVB’s losses, and the company hasn’t successfully garnered notable commitments in further funding.
With its stock value having dropped 60 percent two times in a week, SVB Financial may be in utterly dire straits. Stay tuned as we continue to follow this story for further updates.