Roku stock is down 2.29$ after hours. I wonder if there is any money to be made shorting companies wrapped up in this mess.
The real money to be made is in betting it will go back up if Fed finds a way to make SVB depositors whole.
Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
141–150 of 222 posts
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#142Earlier quoted context omitted.
It's exceedingly unlikely to be anything less than 99. The FDIC wants to reassure everyone so there aren't more runs. Do you really think they're going to let the eventual purchaser not make everyone whole?
That's a bold statement and not in line with FDIC actions for previous bank failures.
Is it not? Most of the time the FDIC will find a buyer and guarantee some percentage (usually ~80%) of all losses to the purchasing bank (plus the very low upfront purchase price, of course) in exchange for them honoring all deposits. So ensuring most deposited funds are safe, at least in the long term, seems to be in line with their usual playbook, even if the unusual circumstances around this particular failure might make that less likely.
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#143Earlier quoted context omitted.
If crypto had a navy and nukes, then maybe.
Switzerland has neither and China has both. Which one would you bank with?
i think this question depends entirely on what passport you hold.
as a US citizen, personally i wouldn't put money in either system.
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#144Earlier quoted context omitted.
This is how financial crises start. IndyMac ($40 billion) went under in July 2008 which caused tension, and then Lehman fell apart two months later which led to 15 institutions failing in a matter of weeks. There are other financial institutions that are suffering. We could definitely see cascades among some of the weaker banks
Those banks were all built on a fraudulent and irrational housing bubble. SVB just bought too many bad bonds and got stuck. I don't see the industry-wide effects from this.
They bought those bonds based on the assumption that money would flow in/out within a certain margin and that margin was exceeded. There will definitely be more cases to come where companies who are supposed to act conservatively took on more risk because they’re used to operating in an environment where it was profitable to do so.
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#145Earlier quoted context omitted.
It's exceedingly unlikely to be anything less than 99. The FDIC wants to reassure everyone so there aren't more runs. Do you really think they're going to let the eventual purchaser not make everyone whole?
That's a bold statement and not in line with FDIC actions for previous bank failures.
> in 55 failures since IndyMac of banks with total deposits over $1 billion, uninsured deposits were fully protected against any loss. The largest failure, Colonial Bank, had $20 billion of deposits, including an estimated $4.4 billion of uninsured deposits.
https://www.cato.org/commentary/fdic-invents-costly-solution...
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#146Earlier quoted context omitted.
If you were ultra paranoid, what other institution types would be advisable to exit? Could this impact investments in the market?
Avoid holding cash above deposit insurance limits. You can play the account titling game as well as use multiple institutions. There are some banks that promise to spread your funds to multiple banks to get coverage; but you need to be sure you don't use those underlying banks elsewhere, etc. For stocks and things, you've got some options. For best protection, you would want to have your stock ownership registered on…
This is why I come here, thank you for the response.
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#147Earlier quoted context omitted.
The drop is in the aftermarket immediately after the 8-K release, so I think we can attribute most of it to the market's gut reaction to this piece of news and not the broader SVB impact (which would have occurred during market hours). Agree that the market might change its mind quickly, especially if estimated recoveries are projected to be high or the depositors completely made whole.
Assuming the markets are rational ;) we take it as an axiom, but that is different than saying expectations are always priced in
> Assuming the markets are rational ;)
I mean, they are on a long enough timeline, but they tend to be able to stay irrational longer than you can remain liquid.
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#148Earlier quoted context omitted.
Can you name the 16th and 17th largest banks? Most of us can think of a few big ones, and a handful of local ones.
Test your knowledge https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U... I might have known 50% of the top 20 maximum.
I know 7 from list 1..10 and 2 from list 11..20
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#149I was astonished that Roku has half a billion in cash. Then I learned this was only 26% of its cash reserves. I thought cash was considered wasteful because it loses value via inflation. Has the thinking changed? Can someone knowledgeable please help me understand this?
It was higher than I expected, but kinda makes sense. You're right that cash does lose value via inflation, but you need cash for when you need it. Looks like they sold a billion worth of stock in 2021 when times were good. I'd think they could invest in some bonds but long dated bonds dropped 20% in value last year so good job they didn't. https://finance.yahoo.com/quote/ROKU/balance-sheet?p=ROKU
Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB
#150Earlier quoted context omitted.
Monday will tell. FDIC will have done enough rough accounting to roughly get an idea of how much money large depositors will actually get. It's also entirely possible a deal gets worked out over the weekend that results in all cash depositors being whole at a new bank. Monday will tell.
Oh, did they? I hadn't seen that yet.
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