Key Points:
In order to maintain “a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset business,” the company stated it is working to preserve money.
Following the company’s announcement of a $1 billion fourth-quarter loss and a 20% employee reduction, Silvergate’s price has been erratic this month. Although they have recently increased, cryptocurrency values are still far below their 2021 highs. The demise of 3AC and FTX has had an impact on the entire business.
“We were surprised by the announcement, to be frank, as SI hadn’t previously indicated it was contemplating pausing the dividend payment in recent public commentary,” KBW analysts led by Michael Perito wrote in a note. “The bank indicated it still has more cash than deposits as of the date of the announcement (1/27), and we continue to have no liquidity concerns.”
The company said it “continues to maintain a cash position in excess of its digital asset customer related deposits,” and the board will re-evaluate the payment of quarterly dividends as market conditions evolve.
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