WhatExit?
Well-Known Inmate #'s 2584 & 20161
- Joined
- Jul 19, 2017
- Messages
- 15,548
- Reaction score
- 33,064
The wheels started to come off on Wednesday, when SBV announced it had sold a bunch of securities at a loss and that it would sell $2.25 billion in new shares to shore up its balance sheet. That triggered a panic among key venture capital firms, who reportedly advised companies to withdraw their money from the bank.
The company’s stock cratered on Thursday, dragging other banks down with it. By Friday morning, SBV’s shares were halted and it had abandoned efforts to quickly raise capital or find a buyer. Several other bank stocks were temporarily halted Friday, including First Republic, PacWest Bancorp, and Signature Bank.
The mid-morning timing of the FDIC’s takeover was noteworthy, as the agency typically waits until the market has closed to intervene.
“SVB’s condition deteriorated so quickly that it couldn’t last just five more hours,” wrote Better Markets CEO Dennis M. Kelleher. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”
The company’s stock cratered on Thursday, dragging other banks down with it. By Friday morning, SBV’s shares were halted and it had abandoned efforts to quickly raise capital or find a buyer. Several other bank stocks were temporarily halted Friday, including First Republic, PacWest Bancorp, and Signature Bank.
The mid-morning timing of the FDIC’s takeover was noteworthy, as the agency typically waits until the market has closed to intervene.
“SVB’s condition deteriorated so quickly that it couldn’t last just five more hours,” wrote Better Markets CEO Dennis M. Kelleher. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”