SVB Financial Group is trying to find a buyer after its Silicon Valley Bank (SVB) unit was closed by regulators on Friday amid deposits and losses on its securities portfolio, Bloomberg reported.
“A transaction might involve selling the company’s assets piecemeal or as a whole, according to a person familiar with the matter,” Bloomberg reported. “The goal is to complete a deal by Monday, the person said, asking not to be identified discussing private matters.”
On Friday, regulators seized SVB’s assets after a bank run. The collapse marks the largest failure of a bank since Washington Mutual collapsed during the 2008 financial crisis.
As ABC News reported:
Silicon Valley Bank’s failure arrived with incredible speed, with some industry analysts on Friday suggesting it was a good company and still likely a wise investment. Silicon Valley Bank executives were trying to raise capital early Friday and find additional investors. However, trading in the bank’s shares was halted before stock market’s the opening bell due to extreme volatility.
Shortly before noon eastern, the Federal Deposit Insurance Corporation moved to shutter the bank. Notably, the FDIC did not wait until the close of business to seize the bank, as is typical in an orderly wind down of a financial institution. The FDIC could not immediately find a buyer for the bank’s assets, signaling how fast depositors had cashed out.
A worker (center) tells people that the Silicon Valley Bank (SVB) headquarters is closed on March 10, 2023, in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. Federal Deposit Insurance Corporation. (Justin Sullivan/Getty Images)
SVB has deep ties to Silicon Valley and was thought to boost the credibility of startups who banked there in their efforts to secure new investors or go public.
One silicon valley tech executive called the bank’s failure an “extinction-level event for startups.”
“I literally have been hearing from hundreds of our founders asking for help on how they can get through this. They are asking, ‘Do I have to furlough my workers?’” Y Combinator CEO Garry Tan said.
SVB’s shares fell 60 percent on Thursday after the financial institution announced a plan Wednesday evening to raise more than $2 billion in capital. SVB sought to sell $1.25 billion in common stock and $500 million of convertible preferred shares as part of Wednesday’s plan.
The bank also had last-minute plans to raise $2.25 billion in a deal run by Goldman Sachs Group Inc., but it also abandoned those plans.
In the days leading up to the bank’s crash, SVB’s parent company reportedly hired advisers to help find a buyer but ultimately failed.
Jordan Dixon-Hamilton is a reporter for Breitbart News. Write to him at jdixonhamilton@breitbart.com or follow him on Twitter.
Comments are closed.