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Ask HN: How is the SVB situation affecting your startup?

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Re: Ask HN: How is the SVB situation affecting your startup?

#111

Post by morelisp »

bgentry wrote: post #93
lotsofpulp wrote: post #51

Earlier quoted context omitted.

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...

They're #18 on the US list you linked, I saw other articles saying they were #16 so it probably just depends on the date assets were measured.

The falloff is extremely rapid. They're closer in both an absolute and relative sense to the 40th than even the 10th.

Re: Ask HN: How is the SVB situation affecting your startup?

#112

Post by Lightbody »

Lightbody wrote: post #55

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…

Well this comment aged well

Re: Ask HN: How is the SVB situation affecting your startup?

#113

Post by KerryJones »

KerryJones wrote: post #50

Investor here (trying to buy into SVB), but I don't currently own anything, nor do I have any current accounts with SVB. Everything I can see about them is completely overblown. Short and sweet version of research so far: - They had sold their bond portfolio for 1.8B loss (originally 21B, this is 8.5% loss) - They decided to raise money to match that loss (news release on 3/8/23) - Headlines are confusing people with…

Well, I was wrong: https://www.fdic.gov/news/press-releases/2023/pr23016.html

Re: Ask HN: How is the SVB situation affecting your startup?

#114

Post by NickC25 »

rr808 wrote: post #91
blitzar wrote: post #76

Earlier quoted context omitted.

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'm guessing the puts expire today, maybe this afternoon we'll know more.

my puts expire next week, on the 17th

Re: Ask HN: How is the SVB situation affecting your startup?

#115

Post by paulette449 »

raesene9 wrote: post #19
hkhanna wrote: post #2

Personally, I don't think there's a real problem unless everyone panics. Banks are well-regulated and stable and have been for decades. That said, my investors & cofounder have both expressed gratitude that our startup banks with Mercury and not SVB.

Whilst banks may have lots of regulations (depending on their country of operation), banks do fail reasonably regularly. For example this list of US bank failures https://en.wikipedia.org/wiki/List_of_largest_U.S._bank_fail...

Almost all banks on that list failed during the aftermath of Black Monday (1987) or during the Great Financial Crisis (2007-2010).

Re: Ask HN: How is the SVB situation affecting your startup?

#116

Post by greenie_beans »

jtarud wrote: post #58

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.

this comment will be legendary.

Re: Ask HN: How is the SVB situation affecting your startup?

#117

Post by ghoomketu »

I have about $1800 in it as I was forced to open an account with them for Stripe atlas. It was a bit more but I think they deduct $25 / mo for the past 3 years. Not really using it since Stripe started in India recently.

From what I understand since my amount is low I don't have to really do anything. Is that correct? Any advice for me?

Re: Ask HN: How is the SVB situation affecting your startup?

#118

Post by rr808 »

NickC25 wrote: post #114
rr808 wrote: post #91

Earlier quoted context omitted.

I'm guessing the puts expire today, maybe this afternoon we'll know more.

my puts expire next week, on the 17th

You should be good then. You should be able to buy the stock for pennies on the OTC market. Congrats!

Re: Ask HN: How is the SVB situation affecting your startup?

#119

Post by cragfar »

KerryJones wrote: post #50

Investor here (trying to buy into SVB), but I don't currently own anything, nor do I have any current accounts with SVB. Everything I can see about them is completely overblown. Short and sweet version of research so far: - They had sold their bond portfolio for 1.8B loss (originally 21B, this is 8.5% loss) - They decided to raise money to match that loss (news release on 3/8/23) - Headlines are confusing people with…

> - Their Total Equity is around 13B (last balance sheet) -- that means if they completely dissolved and paid off all debts they would still have 13B on the balance sheet. Market Cap EOD 3/9 was 6.5B -- half of their actual asset value

They haven't written down all their bonds yet or seen what they could actually get for them. They only sold the AFS ones, they still have $117 billion in other securities.

Re: Ask HN: How is the SVB situation affecting your startup?

#120

Post by eropple »

NickC25 wrote: post #78
eropple wrote: post #49

Earlier quoted context omitted.

TBH, if you're knowledgeable enough to be playing with puts, you should know that banks don't act like other equities in cases of extremity. It may be a bummer in the individual case, but it keeps the money machine working for society as a whole.

Honestly, that's a fair point (playing with puts) - and yeah, I know that if trading was resumed SIVB shares would drop to $0 or close to it, which would probably trigger a much larger collapse because lots of banks had exposure to SIVB. Thing is though, that's the whole point of banking stress tests and also why the Fed should have raised rates much sooner after COVID. On a side note, the fact that VCs were giving o…

I agree with you entirely on all points. It is a bad situation.
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