There may be hope for Silicon Valley Bank to revive it.
The big boss of Twitter and Tesla, Elon Musk, has hinted at the possibility of the social media giant buying the beleaguered Silicon Valley Bank.
“I think Twitter should buy SVB and become a digital bank,” tweeted Min-Liang Tan in the face of the ongoing chaos. Tan is the founder and CEO of Razer, a company that sells gaming computers.
Elon Musk responded to Tan’s tweet by stating:
“I’m open to the idea.”
On Friday, US regulators announced the closure of Silicon Valley Bank and seized all of the institution’s assets.
I think Twitter should buy SVB and become a digital bank.
— Min-Liang Tan (@minliangtan) March 11, 2023
Silicon Valley Bank Implosion Rattles Global Markets
The move, which made SVB the biggest retail bank to fail since 2008, shook global markets and left billions in corporate assets and investors stranded.
On the same day, the startup’s founders divested themselves of assets in response to the bank’s share price falling following the announcement of a capital increase on Thursday evening.
One Twitter user supported Musk’s proposal, declaring “Opportunity!” However, another person named Sanjay replied, “And sell another $20 billion worth of Tesla stock.” No, thank you!”
The largest US bank failure since the 2008 Great Recession pushed Wall Street traders into frenzy. Source: Getty Images
The impact of Elon Musk’s tweets on the stock market, cryptocurrency prices, and public opinion about his company could be huge.
The billionaire’s tweets often attract media attention, and his comments can cause large price fluctuations in equities and cryptocurrencies.
In addition, his tweets can influence the public’s perception of his companies, such as Tesla and SpaceX.
Musk’s tweets, however, have also been the subject of controversy, with some criticizing his use of Twitter to make announcements or offer thoughts that may not have been carefully researched or carefully considered.
Experts warn that SVB’s death may not be an isolated incident
Meanwhile, SVB shares in New York fell 60% and trading was halted before California regulators announced the bank’s liquidation.
The California Department of Financial Protection and Innovation closed SVB and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
Financial analysts warn that the sudden implosion of SVB, a four-year-old American lender and a pillar of the tech startup sector, may not be an isolated incident, and that clients and investors should prepare for the next domino.
In a video address to staff, SVB CEO Greg Becker indicated that he is working with banking regulators “to identify partners for the bank.” He emphasized that there is no guarantee that a deal will be struck.
According to news accounts, SVB, the 16th largest bank in the United States with a total of 17 branches in California and Massachusetts, mainly serves technology customers and venture capital-backed companies, including some of the most popular brands in the industry.
Crypto total market cap currently at $923 billion on the weekend chart | Chart: TradingView.com
Finding Ways To Save SVB
At the time of writing, Reuters reported, citing Bloomberg News, that the manager of the investment banking unit of Silicon Valley Bank, SVB Securities, is looking for a way to buy the failed lender back from the parent company.
Jeff Leerink, CEO of SVB Securities, and his team are seeking financing for a prospective management buyout of the company, according to reports citing individuals familiar with the situation.
Bitcoin was little changed after the news of SVB’s implosion, trading at $20,404 at the time of writing Sunday, data from crypto market tracker Coingecko shows.
-Image shown is from Mirchi9