Posted by Barry Norris
Less than seven weeks ago, amid a general mood of optimism that the worst was over for the technology industry, with expectations that the Federal Reserve was nearly done raising rates, Silicon Valley Bank shares rose 17% as it reported its full-year 2022 results. One bulge bracket bank announced that the company was “on the mend”; another suggested its clients start “aggressively accumulating SIVB shares.”
Posted by Barry Norris
Argonaut has been short Silicon Valley Bank (SVIB) for the last six months, with an average entry price of $260. On Wednesday evening, the bank announced a $2.5bn equity raise and a $21bn sale of held-to-maturity Treasury and Agency securities (which realized a $1.8bn loss). Subsequently, its share price fell 60%. Today, it has been reported that the capital raising has failed, and the bank is working on a sale, which in our view will not recover any value for its equity investors. After falling another 40% pre-market, the stock has been suspended from trading.
