Silicon Valley Bank (SVB) announced a US$2 billion fundraising plan due to investment failures in its portfolio. This incident dragged down the stock price of the parent company Silicon Valley Bank Financial Group (SVB Financial), which was forced to suspend trading on March 10. The failure of Silicon Valley Bank shocked the US market. Will ordinary investors be affected?
Does it matter to retail investors?
The current situation of banks is still very unstable, and the follow-up development remains to be seen, but investors in other banking stocks do not need to panic too much, because it mainly provides financial and financing services for US technology and start-up industries. This is a unique business model in the banking industry.
Having said that, ordinary investors are unavoidably nervous, especially the recent news of unfavorable science and technology companies, as well as the start-up circle. John Stepek, executive editor-in-chief of the British “Financial Weekly”, published an article on Bloomberg on the 10th. He believes that overall the U.S. banking industry should be fine. The main question is how many entities in the banking industry will eventually be affected, and at what point will the U.S. Federal Reserve intervene.
Stapek said the failure of Silicon Valley Bank would not have an impact on the average investor’s portfolio. He suggested that investors maintain their portfolios, use funds for small investments they understand, and buy some gold, saying that in the long run, there will be no major problems.
Will the crisis be lifted?
According to foreign reports, the parent company of Silicon Valley Bank aims to find a buyer before the 13th, and is expected to sell part or the entire company’s assets.
The FDIC prefers to sell insured deposits and other assets to a sound bank.
US Consumer News and Business Channel (CNBC) quoted sources on the 10th as saying that after the failure of financing, Silicon Valley Bank has hired consultants to discuss the sale of the matter, but its deposit loss is too fast, and it may be difficult for potential buyers to assess the true value of the bank. The outside world still has no way of knowing when the “White Warrior” will appear.
Where is the hardest hit area?
Silicon Valley Bank mainly provides financing services to technology and start-up companies, and is the only large bank willing to lend money against illiquid securities. His closure largely affected specific start-ups. They may not be able to obtain funds as a result.
The financial news website Motley Fool quoted a report on the 10th that a number of venture capital firms such as Coatue Management, Union Square Ventures and Founder Collective also advised their invested companies to transfer funds from SVB.
Will the Silicon Valley Bank SVB crisis affect ordinary investors?
The current situation of banks is still very unstable, and the follow-up development remains to be seen, but investors in other banking stocks do not need to panic too much. Some experts put forward two suggestions for technical investors…
