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1. SVB = So Very Bad.
Yikes!
That sums up how Thursday went for bank stocks.
As Insider's Matthew Fox reports, it was a bit of a bloodbath for banks, as everyone from the biggest players to small regionals saw their shares dip considerably. The KBW Bank index dropped 7.7%, which was its biggest decline since June 2020, Matthew reports.
SVB Financial is the parent company of Silicon Valley Bank, which is a firm you might not be familiar with, but plays a key role in the world of startups. The bank has been a favorite among tech startups, venture capitalists, and entrepreneurs for decades.
As you can imagine, the past year has not been kind to SVB. When a bank's clients are hurting, the bank hurts too. And SVB has very much felt the pain of the downturn in tech-startup land.
But things took a much worse turn recently. SVB had to sell a $21 billion bond portfolio for a $1.8 billion loss (thanks a lot, interest rates!). The bank followed that up by announcing it needed to raise another $2.3 billion from investors by selling off its own stock (which is never a good thing for the share price).
Thankfully, the VC and startup community kept a cool head through it all and didn't overreact.
Blame SVB. Blame the VCs. Blame the press. Blame social media. It doesn't matter who you want to point the finger at. It seems the damage is already done, to a degree, and a panic has set in. As Ben and Darius report, some rivals are already pitching SVB's clients to move their money over.
On the one hand, VCs should know better than to cause this type of fear. A bank panic is a self-fulfilling prophecy. If you're not panicked, there won't be a panic. Thankfully, it appears, at least some founders have realized this and are calling for calm, as Samantha, Ben, and Darius report.
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However, I am sure the implosion of FTX is fresh in plenty of investors' minds. And while I'm not trying to draw any comparisons between the two firms, which are light years apart, I could see skittish VCs jumping to conclusions and thinking the worse.
Meanwhile, most founders aren't in the position to take a stand against an investor they could need a lifeline from in the coming months. So if the VC wants them to pull the cash, that's what they'll do.
3. JPMorgan is trying to pin the blame on Jes Staley. The bank filed a lawsuit against its former top private banker that he should be held liable for any damages it might have to pay over its ties to Jeffrey Epstein, Bloomberg reports. More on that here.
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4. More bad news at Credit Suisse. The Swiss bank delayed filing its annual earnings after a "late call" from the Securities and Exchange Commission. Here's why people are worried.
7. Florida Man reigns supreme. Florida is now the fastest-growing state in the US, having come out as a big winner from the pandemic. More on how Florida has attracted so many new residents. (Hint: It's not just because of the beaches.)
8. Please don't get any ideas from the latest episode of "The Last of Us." If the most recent episode has you contemplating adjusting your diet, that would be a bad idea. Click here to understand why. (Don't click if you aren't caught up!)
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9. This is what has got you down in the dumps. Wondering why you're feeling down lately? Experts gave us some surprising reasons why you might not be able to turn that frown upside down. Read up on seven reasons you're unhappy and how to fix it.
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