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Silicon Valley Bank, long one of the most popular financial institutions among tech and life sciences startups, saw its shares fall more than 60% on Thursday, wiping out a whopping $9.4 billion in market value.
Driving the news: Several top venture capital firms, including Coatue and Founders Fund, have suggested to some portfolio companies that they strongly consider pulling money out of SVB, as concerns grow over the bank’s stability.
The big picture: SVB announced plans to launch a $1.25 billion common stock sale, plus raise another $1 billion via other share sales, after rising interest rates sparked large losses on its Treasury and mortgage-backed securities portfolios.
The bottom line: Most business accounts are only FDIC-insured up to $250,000, and some of SVB’s clients are clearly worried about becoming the last one in line at the proverbial ATM.