Reading up on SVB
SVB Races to Prevent Bank Run as Funds Advise Pulling Cash
The catalyst (?). Article doesn't go into details on the "significant loss", I'd like to know if it was somehow related to FTX or like.
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The turmoil followed a surprise announcement from Santa Clara, California-based SVB that it was issuing $2.25 billion of shares to bolster its capital position after a significant loss on its investment portfolio. The stock plunged 24% in premarket trading before exchanges opened in New York on Friday, set to extend its 60% decline on Thursday. Bonds had posted record declines, igniting a broad selloff in US bank shares that also spread to Asia and Europe.
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The run
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Founders Fund asked its portfolio companies to move their funds from SVB, according to a person familiar with the matter who asked not to be identified discussing private information. Coatue Management, Union Square Ventures and Founder Collective also advised their portfolio companies to pull their money, people with knowledge of the matter said. Canaan, another major VC firm, told its portfolio companies to remove their cash on an as-needed basis, according to another person.
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Venture firm Tribe Capital has also advised its portfolio companies to move some, if not all, of their balances from SVB.
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Another firm, Activant Capital, sent emails and texts to its portfolio company CEOs encouraging them to transfer their SVB balances to other lenders,
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An email thread of more than 1,000 founders from Andreessen Horowitz was abuzz with the news Thursday, with many encouraging each other to pull cash from the bank.
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“This is a classic bank run, and when the bank run starts you don’t want to be the last guy there,” Ava Labs President John Wu said in an interview with Bloomberg Television. Wu said that his company had “already diversified” away from its reliance on Silicon Valley Bank.
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Hard to see how this bank survives, and if it does, it'll be a much smaller self.