Silicon Valley Bank (SVB) is the world’s largest lender to technology start-ups, specializing in early-stage business lending, and raising nearly half of the US-backed technology and healthcare companies that listed on the stock markets last year.
After the stormy crisis that hit the bank and with it a large segment of companies and depositors, the federal government intervened, and the regulators’ first move was in the state of California, so they closed the bank and put it under judicial receivership, under the Federal Deposit Insurance Corporation.
A set of decisions were also announced after a meeting of the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation, to protect consumers and the banking system.
But despite these moves, a state of panic prevails among the companies that were supported by Silicon Valley Bank, and some of them announced huge losses that could lead to their closure or directly affect their employees.
Roku
Roku is an American technology company that designs video streaming devices and smart TV, and develops multimedia software.
- The company said it has about $487m of the $1.9bn in the Silicon Valley bank, about 26 per cent of its funds.
- The company’s deposits with the bank are largely unsecured, according to a document published by Roku.
- At this time, the company does not know to what extent the company will be able to recover the cash deposited with the bank.
- San Jose-based Roku, which went public in September 2017, has said it has enough funds and cash flow to “satisfy its working capital” for at least 12 months..
- By the close of US markets on Friday, Roku’s share value was 99 dollars, or 53 cents less than the previous day, a decrease of 0.88 percent.
BlockFi
- Blockfi is a financial services company that offers cryptocurrency-backed loans.
- She has $227m in a Silicon Valley bank, according to her bankruptcy filing.
- Blockfi funds are not insured, as they are in a money market mutual fund, which is a type of fund that invests in cash and short-term, low-risk debt securities..
- The cryptocurrency bank filed for bankruptcy in November after the arrest of Sam Bankman Fried, the company’s CEO FTXa cryptocurrency company and exchange.
- Although Fried pledged to bail out BlockFi and loan him $400 million to it, the company filed for bankruptcy.
It is noteworthy that the company has an international subsidiary in Bermuda, which also filed for bankruptcy there.
Roblox
- California-based online gaming platform Roblox said in a document it submitted, Friday, to the Securities and Exchange Commission, that about 5 percent of its $3 billion in cash (as of February 28) was held in Silicon Valley Bank..
- Chief Financial Officer Michael Guthrie said in the document that “regardless of the outcome of the bank’s collapse and the timing, this situation will have no impact on the day-to-day operations of the company.”“.
At market close Friday, Roblox shares were valued at 40.05 dollars, up 0.28 percent from the previous day.
Circle
Payments technology company Circle tweeted on Friday that $3.3 billion of the $40 billion in cryptocurrency reserves are pegged to the US dollar. (USDC) I stayed in Silicon Valley Bank.
USDC stands for USD Coin, and is a type of digital currency pegged to the value of the US dollar, launched in 2018 by Circle and Coinbase, and used for investments, payments, and other transactions.
- Boston-based Circle said: “Like other customers and depositors who have relied on a silicon bank, Circle joins calls for the continuity of this important bank in the US economy, and guidance provided by state and federal regulators will be followed.”“.
- In another tweet, she said, “The bank is one of 6 banks that use it to manage 25 percent of their USDC reserves held in cash.
- The company had about $44.5 billion of currency in circulation in mid-January, according to a standby report from accountants at Deloitte.
- Circle, which traded at less than a dollar on Friday, said: “While we await clarification of how the FDIC’s guardianship of Silicon Valley Bank will affect depositors, Circle and USDC work normally“.
Axsome Therapeutics
- The drugmaker, Axsome Therapeutics, said it had large cash deposits in a Silicon Valley bank and another bank.
- The company said it “believes that a second bank account and an existing loan will be sufficient to continue financing operations.”
- The company is owned by the public and private sectors. At Friday’s close, its share value was 39 dollars, down 5.78 percent from the previous day.
Etsy
- The popular e-commerce platform, Etsy, warned Friday that some deposit payments have been delayed, according to an email from the company published by NBC News. It is not known how many vendors were affected by the delays.
- Etsy, which focuses on artisanal products and handmade items, has more than 95 million buyers and 7.5 million sellers worldwide..
- A spokesperson for the platform told the Washington Post, “We recently experienced delays in issuing payments to some sellers due to the unexpected collapse of Silicon Valley Bank.”
- “Our teams are working around the clock to implement a solution, and we expect to be paying the sellers via our other payment partners within the next business days,” the spokesperson said.
Shares of Etsy closed at $105.98 on Friday, down 1.63 percent..
Camp
- Privately owned New York-based toy store Camp took to social media to plead for help, just hours after regulators shut down a Silicon Valley bank on Friday..
- The store posted on its social media accounts, a post confirming the collapse of its bank, calling on customers to buy goods at a 40 percent discount online..
- In an email sent to clients Friday, co-founder Ben Kaufman said, “Unfortunately, most of our company’s cash assets were in a bank that just collapsed. I’m sure you’ve heard the news,” according to CNN.
Compass Coffee
- An email from Compass Coffee CEO Michael Haft revealed that the Washington, D.C.-based coffee company’s payroll was “severely affected” by the Silicon Valley bank collapse, Fox Business reported..
- Haft explained that the private coffee company, “has learned that its payroll has not been processed by the bank as planned.”
- Employees are expected to receive their payment by Monday at the latest, depending on their (employees’) bank.
- Haft added, “The company is working tirelessly on this issue and is taking every possible step to avoid a similar situation in the future. The company has changed service providers for the next week.”
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