This stuff makes crypto exchange drama look like child’s play.
SVB in talks to sell itself after attempts to raise capital fail
61–70 of 310 posts
Re: SVB in talks to sell itself after attempts to raise capital fail
#62Re: SVB in talks to sell itself after attempts to raise capital fail
#63Re: SVB in talks to sell itself after attempts to raise capital fail
#64Earlier quoted context omitted.
They went beyond it for several banks: To my knowledge, nobody lost money in the dozens of banks that the FDIC closed in the 2008 meltdown, despite several depositors being beyond the FDIC limits.
Did they even have that power in 2008? I remember they issued a statement about how they could have avoided losses for creditors, had they properly liquidated Lehman Brothers [1]. [1]: https://www.fdic.gov/regulations/reform/lehman.html
> Did they even have that power in 2008?
I don't remember tbh, but IndyMac (in July 08) was before Lehman (in Sept) so I think the answer is yes.
Re: SVB in talks to sell itself after attempts to raise capital fail
#65I'm feeling like this is early days of a disaster in Silicon Valley. We're at the first or second domino teetering right now. I hope a Sequoia or KPB will step up and save the bank, otherwise a lot of their portfolio investments are about to start missing payrolls.
The same Sequoia who bet the farm on FTX? I'll sit tight and wait for the FDIC. They have ample authority to do an orderly liquidation in a worst case scenario.
Sequoia has $85B AUM. Despite its insanely large bet (hundreds of millions) into FTX, it didn't "bet the farm." Far from it.
Re: SVB in talks to sell itself after attempts to raise capital fail
#66I'm feeling like this is early days of a disaster in Silicon Valley. We're at the first or second domino teetering right now. I hope a Sequoia or KPB will step up and save the bank, otherwise a lot of their portfolio investments are about to start missing payrolls.
Playing out this scenario:
Will missing payrolls result in layoffs/resignations? Thus, increasing unemployment rate that the FED desires. If contagion doesn’t spread outside of tech/startup, does the government have any incentive to intervene? Maybe this is not too big to fail.
A sale seems like the most likely scenario out of this liquidity problem (insolvency). It’ll be dirt cheap and has to make sense to its buyer.
edit: Even with recent downturn in tech, there is still sizable value in having tech as banking clients.
Re: SVB in talks to sell itself after attempts to raise capital fail
#67This stuff makes crypto exchange drama look like child’s play.
Centralized crypto exchanges are not a safe haven. Never have been.
It does make fully on-chain USDC and DAI stablecoins look like refuges though.
Re: SVB in talks to sell itself after attempts to raise capital fail
#68Very curious to understand how this works. For all intents and purposes, if the bank was unable to raise capital, it is at least nominally bankrupt. What value would another entity find in a bank that has failed? To be fair, the government may find value in shoring this bank up. That's a different story. The bank will be essentially nationalized at that point.
It’s very common for a larger bank to buy out a smaller bank, even if it is nominally bankrupt. Sometimes the government steps in and helps out by providing various guarantees or short term funding. This is nominally a bailout, but may actually save taxpayers money by not having to involve the FDIC. See: WaMu being bought out by JPMorgan Chase for $1.9 Billion in the 2008 crisis.
Wasn't this a famously bad transaction for JPM?
Re: SVB in talks to sell itself after attempts to raise capital fail
#69Will all the private assets that have avoided markdowns since the downturn be forced to get re-valued when a new entity buys SVB?
They’d have to I assume to value their new books.
If yes that’s a lot of valuation haircuts.
Re: SVB in talks to sell itself after attempts to raise capital fail
#70I'm feeling like this is early days of a disaster in Silicon Valley. We're at the first or second domino teetering right now. I hope a Sequoia or KPB will step up and save the bank, otherwise a lot of their portfolio investments are about to start missing payrolls.
The same Sequoia who bet the farm on FTX? I'll sit tight and wait for the FDIC. They have ample authority to do an orderly liquidation in a worst case scenario.
Well if a startup just closed a $20MM round they'll get back $250,000 after a long unwinding from the FDIC. So that's a pretty big haircut.
I look to Sequoia because, of any VC fund, they are the most likely to be able to pull off a takeover of SVB. I am still gobsmacked that they invested hundreds of millions in a company with no board or CFO (FTX)