Adding to the market turbulence in the tech sector, Silicon Valley Bank announced that it was selling off assets and borrowing more money. The stock price crashed right after opening on Thursday, according to MarketWatch. This may be an indication that investors are concerned about a possible wave of insurance company failures in the tech industry.
Though the market reaction to SVB’s move was largely unfazed by its financials, some observers were quick to downplay the significance of startup burn rates. Shutting down businesses at a much higher rate than normal is something that many banks are likely seeking to fix, but it wasn’t what caught most people’s attention. The real “juicy bit” of the news was SVB’s acknowledgement that their startup-signing spree is still far from finished – and that they’ll need to bring in even more talent in order to keep up with customer demand.
The tweets from Twitter about the potential for a bank run were likely just speculation until fears over the bank’s health arose. Customers quickly withdrew their deposits, causing SVB to suffer a financial crisis.
Startups are a hot topic with many people interested in hearing about them. While it can be difficult to determine what is a startup, there are some general tips to keep in mind when researching this type of business. One idea to
Have you ever wished that there was a way to measure your productivity not just in terms of hours worked, but also based on the quality and quantity of work produced? Studies have shown that people who produce high-quality work are typically more productive overall than those who produce lower quality work. There is now a tool available to help make
The failure of SVB to right the ship by seeking investments may end up being its undoing as the company looks to sell itself. With a market capitalization of just over $5 billion, there may be interested buyers who are willing to jump on board and help turn things around. However, given the current environment, it is uncertain if anyone will be willing to make such an investment given the current state of the economy.
In 1914, the world was on the cusp of a new age. Technology had progressed tremendously in the preceding decade and war seemed like an impossibility. However, on July 28th, 1914 Germany invaded Belgium in remembrance of its fallen soldiers. The French and British refused to believe that this small country could put up much of a fight, but within five days they were confronted with
- The COVID-19 venture boom was partially predicated on money being incredibly cheap: Global interest rates were low to negative, so there were quite a few places to put capital to work. This led to larger venture funds, which invested a lot of their money into startups, which in turn deposited that into SVB since that was, until recently, the premier destination for startups’ banking needs.
- However, as the FT notes, the massive rise in deposits at SVB — never a bad thing at a bank — eclipsed the bank’s ability to loan capital. This meant it had a lot of money lying around.
