Shares of SVB Financial Group, also known as Silicon Valley Bank, experienced a second consecutive day of decline, causing negative effects on the overall banking sector. In an attempt to alleviate client concerns following a 60% drop in the stock, SVB’s CEO Greg Becker held a call with clients on Thursday afternoon. Despite this effort, the shares continued to decline, dropping by an additional 61% in premarket trading this morning.
Here’s how serious this is: a few hours ago, Bill Ackman (CEO of Pershing Square) tweeted, “The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.”
Although they are unrelated, it’s hard to separate Silvergate Bank (which failed earlier this week) with the potential fate of SVB. Let’s hope for the best.
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.