SVB sinks, wipes out $61 billion in market value of bank stocks

Nervous investors got another scare Thursday after Silicon Valley Bank announced plans for $1.75 billion in common and depository shares.

SVB shares fell 60.4%, the largest percentage drop since 1998, which wiped out a market value of over $9.5 billion as investors speculated on the financial health of SVB the Bank which, according to its own description, serves both the “most innovative companies in the world” and “fast-growing customers”.

This followed the bank’s disclosure of mounting losses.

“While VC deployment met our expectations, client cash burn remained high and continued to rise in February, resulting in lower than forecast deposits as higher interest rates continue to put pressure on the NII and NIM,” CEO Greg Becker wrote in a letter to the investors.

The move comes after Silvergate Capital, which is heavily exposed digital assetsannounced liquidation plans.

SILVERGATE ANNOUNCES PLANS TO FINISH

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Becker is said to have communicated this on a call on Thursday venture capital Community should “keep calm” The information reported. Inquiries from FOX Business to SVB were not immediately answered.

JPMorgan, Wells Fargo, Bank of America and Citigroup fell in sympathy, wiping out over $60 billion in market value, including SVB, as tracked by the Dow Jones Market Data Group. It was the worst day for bank stocks since 2020, which fell over 4% as a group.

The decline also weighed on the broader market, with the S&P 500 down 1.8%, the Nasdaq Composite down 2% and the Dow Jones Industrial Average down 1.6%, or 543 points.

Silvergate shares have lost 84% of their value this year.

BITCOIN SLIDES ON SILVERGATE FALLOUT

In Wednesday’s announcement, the company stated: “Given recent industry and regulatory developments, Silvergate believes that an orderly winding-up of the bank’s operations and a voluntary liquidation of the bank is the best path forward. The bank’s resolution and liquidation plan includes a full repayment of all deposits. The company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax credits.”

The story goes on

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Bitcoin fell below $21,000 after Silvergate disclosure.