Silicon Valley Bank

From what I heard they weren’t going to have an issue until the run on deposits started.
Obviously more info may come out later.

 

https://www.svb.com/globalassets/li...vironmental_social_governance_report_2022.pdf

 

CNBC's Jim Cramer touted Silicon Valley Bank stock

 

Yeah, just updated my post. VC clients had a panic and withdrew $42-43B.

 

Okay? Still doesn't change that they were viewed as a particularly low risk company from an ESG perspective.

 

ESG is not an good indicator of a bank's health.

 

Certainly not demonstrated by a bank that is below median value on that metric in the industry failing.

 

Hey they were strong on diversity, equity, inclusion and the environment so no worries. Banking, no time for that. The whole company went on a ski trip in Tahoe last month so they were totally focused on business and making sure they did their best to protect the assets of their clients.

 

I would not put one penny in a high ESG scoring bank.

 

Agreed.

I want smart banking that hires the best and brightest minds.

 

I would think that would hurt most banks liquidity.

 

Okay, good luck investing in this bank then, while staying away from some of the highest performing bank stocks.

 

Cramer is a fool. The only thing he is good for is if you are a contrarian, then you can do the opposite of what he recommends

 

Thiel told people to get out and there was a run

 

Yeah I mentioned that up thread.

Wonder if he has any culpability

 

I don't necessarily agree with what Thiel said/did, but didn't he have every right as a major depositor and stakeholder?

 

Trying to understand your question. With SVB either acquired by a bigger, more conservative fish or left to rot, either way, the net impact is significantly less capital available to risky start-up ventures.

Now, you can argue that this is a good thing, but you can't argue that there's no systemic impact on the tech (and biotech) sector.

 

Damn, they sucked at ESG and being a bank!

 

My question was to one of the posts up-thread about the impact of interest rates on the tech sector in general. I did not understand that. This was one, albeit a very large, bank failure due to a run on accounts, mostly by people advised by VCs to panic, despite there not having been a liquidity problem to begin with at the bank.

Yes, the impact of the failure will be felt wide spread, but why would this event be seen as a harbinger of systematic problems tied to rising interest rates per the poster about??? That was what I was asking him/her about.

 

They provide (I guess provided) a revolving line of credit to the private equity firm I work for.

They were very generous about offering cash flow revolvers (or lines of credit where the only collateral is future cash flow).

Considering that future cash flow for private equity firms comes from speculative investments with massive amounts of debt on each investment seemed like a dumb loan product. Taking the risk of an equity investment with returns of a debt investor. The private equity and VC business model is based on the winners paying for the losers. That doesn’t work when you get 3% returns on the winners and no equity upside.

The news articles all say this was an old fashion run on the bank, so who knows.