The end (of the week) is here! Dan DeFrancesco in NYC, and I wish I had more to say, but I am just ready for the weekend.
Fun fact Friday: Musician Johnny Cash was the first American to learn of Joseph Stalin’s death.
Today, we’ve got stories on JPMorgan playing the blame game, more problems at Credit Suisse, and some easy fixes to improve your mood.
But first, please don’t take your money.
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1. SVB = So Very Bad.
That sums up how Thursday went for bank stocks.
As Insider’s Matthew Fox reports, it was a bit of a bloodbath for banks, as everyone from the biggest players to small regionals saw their shares dip considerably. The KBW Bank index dropped 7.7%, which was its biggest decline since June 2020, Matthew reports.
But the real star — or perhaps supernova — of Thursday was SVB Financial, which saw shares drop as much as 62%.
SVB Financial is the parent company of Silicon Valley Bank, which is a firm you might not be familiar with, but plays a key role in the world of startups. The bank has been a favorite among tech startups, venture capitalists, and entrepreneurs for decades.
As you can imagine, the past year has not been kind to SVB. When a bank’s clients are hurting, the bank hurts too. And SVB has very much felt the pain of the downturn in tech-startup land.
But things took a much worse turn recently. SVB had to sell a $21 billion bond portfolio for a $1.8 billion loss (thanks a lot, interest rates!). The bank followed that up by announcing it needed to raise another $2.3 billion from investors by selling off its own stock (which is never a good thing for the share price).
Thankfully, the VC and startup community kept a cool head through it all and didn’t overreact.
It wasn’t long before reports started rolling in about VCs instructing their founders to get their money out. The noise got so loud that SVB’s CEO told them to knock it off, telling VCs to “stay calm,” The Information reported.
Insider’s Samantha Stokes, Ben Bergman, and Darius Rafieyan have a rundown on all the chaos that went down today.
Blame SVB. Blame the VCs. Blame the press. Blame social media. It doesn’t matter who you want …read more
Source:: Business Insider