Market Update 13/3 — A Look into Those Affected by SVB’s Downfall.
As Silicon Valley Bank crumbles, the rubbles caught many by surprise.
The market closed for the week with a tremendous shock as a behemoth collapsed. Silicon Valley Bank (SVB) was seized by The United States Federal Deposit Insurance Corporation (FDIC) on Friday, sending shockwaves of panic across the market. Amidst this collapse many dubs as the most significant failure of a financial institution, startup companies — especially techs — are scratching their heads over the fact that many relate to the bank.
To get ahead on what actually happened, read our piece: Silicon Valley Bank Burst — What Went Wrong?
Now, on the companies that are actually affected by SVB’s failure –
ROKU (NASDAQ: ROKU)
ROKU stands by the most commonly associated name with the current fall of SVB, and it’s not unfounded. The reason ROKU even tops this chart is that it has $487 million stashed in SVB, the most by amount — and sadly that makes up around 26% of ROKU’s cash and cash equivalent as of March 10th, 2023.
That makes ROKU the rightful owner of the first spot — the highest in value, and highest in percentage (at least in this chart).
The situation isn’t looking very nice for its shares price, whereby since the market close, it fell by 6.4%, before stabilizing at around $57, still making it a decline of around 3%.
Roblox (NYSE: RBLX)
Roblox Corp comes second, with approximately $150 million stored in SVB. However, given Roblox’s massive $3 billion cash and securities balance, the massive $150 million only makes up around 5% of Roblox’s cash and securities balance.
The stock did see a fall after the market closed, but that was not the worst fall for the day. Interestingly, the price fell by 5.43% in the morning, before closing 1.91% higher (than the price when it fell). The price did fall by around 0.99% aftermarket — still, it’s higher than the morning fall’s price.
Ginkgo Bioworks Holdings, Inc (NYSE: DNA)
The biotech company have around $74 million stored in SVB. That makes up around 6% of Ginkgo‘s cash and cash equivalent.
Ginkgo’s price fell by 2.36% from open to close, while its open to aftermarket price movement is only down by 1.57%
Rocket Lab USA, Inc (NASDAQ: RKLB)
Rocket Lab have around $38 million held in SVB, which makes around 7.9% of their total cash and cash equivalents, and marketable securities.
The stock opened at $4.06, before falling by 6.65% to $3.79 in the afternoon. The aftermarket price settled somewhere around $3.82.
Sangamo Therapeutics, Inc. (NASDAQ: SGMO)
Sangamo has around $34.4 million in SVB — what makes them scratch their head is not just the amount, but rather the fact that the amount is uninsured.
Its stock fell by 5.22% an hour after market opens, before regaining itself and only making it a -0.87%. However, the aftermarket price saw quite some drama as the price fell by 9.21% from close, before regaining back to make it -5.26% since close.
LendingClub Corporation (NYSE: LC)
LendingClub have around $21 million stored in SVB. However, the amount is not very detrimental to the company’s liquidity. As such, the current fiasco may not pose as much risk to the company’s operation.
Despite that, its stock price went down rather steadily by 6.49% from open to close, before moving steadily at $7.46 aftermarket.
Payoneer Global Inc. (NASDAQ: PAYO)
Payoneer’s risk concerning SVB is around $20 million, which makes up around 0.3% of their $6.4 billion approximate cash balance. The exposure which Payoneer has to SVB is through cash deposits and money market funds.
Payoneer’s stock — much like all the others mentioned before — took a dive of 8.85% from open to close, while its aftermarket price sums up the fall to 17.4% from open to aftermarket price.
Compugen Ltd (NASDAQ: CGEN)
Compugen have around $1 million in SVB, which makes up around 1.3% of its cash and cash equivalents. There isn’t much risk on Compugen’s side with regards to SVB’s fiasco.
In terms of stock price, Compugen is a penny stock which means that the price is more volatile than the others. The price fell by 1.16% from open to close, but the aftermarket movements make the overall movement a positive 2.16%.
Etsy (NASDAQ: ETSY)
Etsy, a marketplace web currently halts its payments to sellers in the website due to its exposure to SBV. Etsy reportedly emailed users telling them that there will be a delay as Etsy uses SBV to facilitate payments to sellers.
Its stock doesn’t take kindly to the SVB news, seeing a dive by as much as 3.7% in the morning since market opened. The price did stabilize, making the price change from open to close at only -1.62%.
QuantumScape Corporation (NSYE: QS)
QuantumScape’s Form 8-K doesn’t exactly tells how much they have exposed to SVB’s downfall, but it does mention that it is in a “low single digit percentage” which is considered as a very limited exposure, considering QuantumScape’s total liquidity and total assets.
QuantumScape’s stock is surprisingly… green! But the price did fall by 2.47% in the afternoon, before going for gains making its open-to-close price at 0.68%. The price did fall by 1.22% from close to aftermarket.
Freshworks (NASDAQ: FRSH)
Freshworks uses SVB for normal operations, like receiving customer payments, payments to vendors, and processing payroll. However, according to them, SVB is not the only bank used for said purposes.
Based on the same announcement they made, their exposure is minimal relative to their overall balance sheet. They are also looking to migrate their affected operations to alternate bank accounts. Freshworks also doesn’t foresee any disruption on their employees and customers.
A few honorable mentions…
1. Wise (LSE: WISE.L)
Wise lauds as the biggest European firm to actually be splattered by the whole SVB fiasco. Nonetheless, its spokesperson assured that the firm is only facing minimal exposure from a credit facility they’re together with alongside 6 other major banks.
They also mentioned that they have a small cash balance in SVB.
2. Shelf Engine
Shelf Engine is a food-management company. According to the CEO, Stefen Kalb, they have millions of dollars raised by them.
Based on the many updates on the news prior to the fiasco, Shelf Engine made around $40 to $60 million from multiple investors. The situation with them is quite dire, given how the crash actually affects the company’s operation — they might even have to consider their employee’s livelihood.
CAMP is a children store which seeks to bring joy into children by selling things like toys, candy, stuffed animals, and all of those sorts. Unfortunately for them, the toys may not be as joyous as they had to plead for help from customers by slashing price for as much as 40% — and to keep a little joy in this tumultuous time — by using the promotional code “BANKRUN”.
As we are speaking, the United Kingdom’s branch of SVB have already been bought by HSBC at the price of £1. How it will play out for the companies surrounding SVB will be dependant on how bad it will actually go.
The main variable right now is how much fear will be injected into the market. The situation at hand is undesirable, that we can be sure on. However, how the market reacts as it opens will set the course for SVB and the companies that is within its blast radius.
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