SVB is in sales talks after failing to raise capital, says CNBC

(Bloomberg) – SVB Financial Group is in talks to sell itself after failed attempts to raise capital amid a bank run, CNBC reported.

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Major financial institutions are considering a possible purchase of the company, CNBC said on Friday. The stock, which tumbled 60% on Thursday, plunged another 63% in early Friday trading in New York before halting trading.

SVB – which has insisted for months that it will not significantly restructure its balance sheet – stunned investors on Wednesday when it announced it was selling 2.25 billion worth of shares.

The company took steps to shore up capital this week after being hit by losses in its securities portfolio and a slowdown in funding at the venture capital-backed companies it serves.

Behind the scenes, Silicon Valley Bank executives had rushed to reassure clients even as prominent venture capitalists advised their portfolio companies to withdraw funds. Some customers complained that they could not do this on Thursday.

SVB’s stock movements this week are a significant turnaround for a bank that has risen to prominence serving burgeoning startups and venture capitalists alike. At the end of last year, the Santa Clara, California-based lender was the 16th largest US bank.

The company has long said it does business with almost half of all US VC-backed startups. But the Federal Reserve’s aggressive drive to hike rates has dampened venture capital funding and depressed valuations.

And this week prominent venture capitalists, including Peter Thiel’s Founders Fund, advised startups to withdraw their money from SVB, according to a person familiar with the matter, who asked not to be identified to discuss private information.

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Coatue Management, Union Square Ventures and Founder Collective also advised startups to withdraw cash, people with knowledge of the matter said. Canaan, another major VC firm, asked companies in which it invested to withdraw funds as needed, according to another person.

–Assisted by Jenny Surane.

(Updates with additional background begin in fifth paragraph.)

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