Key Points:
Since the crash of FTX caused massive withdrawals of deposits, Silvergate had a steady stream of problems last year. As FTX failed, customers withdrew more than $8 billion in deposits from Silvergate. The withdrawal was a factor that led to Silvergate’s loss of nearly $ 1 billion over the previous three months of 2022. Besides, the bank also had trouble with legal authorities during the investigation because of its relationship close to FTX and its founder Sam Bankman-Fried.
The release of the publicly traded bank’s 2022 annual report has been postponed. It admitted there was “ongoing concern” about how it would make enough money. To assess “internal control over financial reporting,” Silvergate asked the Securities and Exchange Commission (SEC) for more time.
Rumor has it that global market maker giant Citadel Securities will step in to salvage the situation in Silvergate and possibly inject more money into cash-strapped Silvergate to help it emerge from a liquidity crunch.
“Internal rumors at Silvergate $SI that Citadel could step up and bail them out; cash infusion where capital shortfalls exist. “
Citadel Securities primarily provides customized liquidity solutions with low market impact and consistent pricing to global clients (including banks, brokers, and system trading firms) and currently holds about 5.5% shares of Silvergate Bank.
When the US stock market closed on Friday, Silvergate Capital Corp’s share price hit $5.77, up 0.87% from the previous day.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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