Some SVB customers are struggling to wire funds out of the bank
Reading Time: 2 minutesThe seeming wave of attempted withdrawals comes after SVB announced yesterday that it lost $1.8 billion in the sale of U.S. treasuries and mortgage-backed securities that it had invested in, owing to rising interest rates. The bank also said that it was raising more capital, and investing into higher-yield products. Concern ensued, leading the share price to tank more than 50% at time of publication.
Dozens of VCs are advising their portfolio companies to pull their assets from the bank, sources say, while others are pushing for founders to at least diversify where they hold their capital. Others, meanwhile, warn that the panic is coming too early — perhaps from earlier news this week that Silvergate, another bank, is shutting down. SVB as a result is clearly experiencing deposit volatility from a subset of its users.
‘We’ll probably wire some, if not all, back when the dust settles,’ the founder said, adding that they don’t want to participate in an attempted bank run. Still, they said, ‘the game theory here is if you don’t, you might lose your company, and if you do, it’s not really that big of a deal.’ The entrepreneur did speak about the ethical obligations on not pulling money, but said that ‘everybody is jittery, everybody is thinking about SBF,’ so they ultimately transferred funds.
In a call earlier today, CEO Greg Becker told clients that said the bank has ‘ample liquidity’ to support its clients ‘with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.’ The executive asked VC clients to ‘stay calm. That’s my ask. We’ve been there for 40 years, supporting you, supporting the portfolio companies, supporting venture capitalists.’
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Reference: https://techcrunch.com/2023/03/09/silicon-valley-back-withdrawal-issues/
Ref: techcrunch
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