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Ring your broker. You can probably still execute the puts and you'll be short.
Then you have to borrow the stock and you are short a stock that you cant buy back because trading is halted - it could reopen at 2x the current price. Better to wait for the trading halt to be lifted, naked puts are the best way to express a short position here.
I think this thread will have tons of views from people in the startup world that are likely to be SVB customers. If we all agree to not do run in the bank, it will improve chances for SVB to make it through the next few days. I'll start with committing not to withdraw money my company [redacted] holds in the bank. We stand by SVB. I invite others to do the same.
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One of the biggest banks in the world failed to account for a capital management risk scenario where interest rates go up? Insane
Silicon Valley Bank was nowhere near one of the biggest banks in the world. https://en.wikipedia.org/wiki/List_of_largest_banks Not even amongst the largest banks in the US: https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U...
I think this thread will have tons of views from people in the startup world that are likely to be SVB customers. If we all agree to not do run in the bank, it will improve chances for SVB to make it through the next few days. I'll start with committing not to withdraw money my company [redacted] holds in the bank. We stand by SVB. I invite others to do the same.
Oh man I actually laughed out loud at this. I don't think your HN comment is going to do anything in the face of the classic prisoner's dilemma.
To the extent that this is a single bank run and the other actors are mostly anonymous and there is no way to verify whether or not someone has withdrawn their money then yeah this is a classic prisoner's dilemma and your only hope is to quickly get in line.
However, trying to change the game is also a viable strategy! Public non-anonymized commitments like this are exactly how you tie this into our broader iterated game and escape the nasty equilibrium of prisoner's dilemma.
It sounds like it's too late to withdraw anyways, so all their customers can do at this point is exercise an emergency plan and line up options for short-term liquidity.
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The banks a decade ago got bailed out. None of their customers lost money.
A bailout is not guaranteed. How long it takes to be made whole is unknown. How long can you go without cash while regulators work out the details. How long will payroll and creditors wait for you to get your cash back. Hope for the best, plan for the worst. Edit (epoch time 16784666958): https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-... (Silicon Valley Bank is shut down by regulators, FDIC to protect i…
Capitalism doesn’t allow planning for the worst. Karl Marx showed us this 150 years ago, and the working class is regularly reminded in blood, but the ruling class just never seems to get it. I wonder why.
Disclaimer: I know next to nothing about the financial system or banking inside baseball. This is just one founder's reaction to the whole mess. We were reluctant to move our funds most of the day yesterday. Felt like a lot of dumb panic. We had emails from a few investors, most saying "stay calm" but one saying "move your money to this bank that I'm invested in!" ugh. We decided near the end of the day to move at le…
A lesson everyone should have learned from the toilet paper scarcity crisis during the pandemic is that it doesn't matter if it's rational or smart, if you want to keep your ass clean make sure you're in the front of a line when people are panicking.
You could make a pretty compelling argument that the last decade the entire tech sector has been propped up by "dumb exuberance", but people aren't complaining about the money they made during that period.
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When assets This isn't just a liquidity problem, this is a solvency problem. The bonds they have aren't temporarily worth less because nobody wants to buy them, the bonds are liquid and have a fair market value based on the current interest rate environment. Your cash isn't at the bank anymore. Your cash has been invested in bonds and those bonds are now worth less than the number you see in your bank account. That's…
> The bonds they have aren't temporarily worth less because nobody wants to buy them, the bonds are liquid and have a fair market value based on the current interest rate environment. Maybe I’m missing something but couldn’t you just potentially wait for the bonds to mature?
Can we stop for a second and comment on how tailoring a bank to startups is a bad idea? You don’t get any exposure to any of their potential hyper-growth in the form of debt/equity. All you get is the deposits but they also don’t grow, the total just becomes concentrated in the accounts of the few survivors while all the other accounts go to zero as most startups die.
It is an excellent customer base for a bank. Startups are going to burn at a fairly moderate rate, such that you have a fairly good idea of the cash flows you would face in the normal course of business - it wouldn't take the most advanced Ai in the world to know for every startup on your books what their cash flow out will look like for the next 12-24 months. By also being tied into the valley and the big VCs you ha…
But even if deposits rise how are you going to propel the money multiplier considering that your customer base doesn’t need loans?
Startups are notoriously scared of any debt/loan
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When assets This isn't just a liquidity problem, this is a solvency problem. The bonds they have aren't temporarily worth less because nobody wants to buy them, the bonds are liquid and have a fair market value based on the current interest rate environment. Your cash isn't at the bank anymore. Your cash has been invested in bonds and those bonds are now worth less than the number you see in your bank account. That's…
It's not a solvency problem. The bonds are valued based on when they mature, not what they fetch on the open market. It is a liquidity issue, which means the money is there, but they can not access the money in the amount of time they need it by.