SI getting pummeled on some combination of crypto and their earnings.
$SI just announced their deposits have plummeted and are cutting 40% off their staff, but have also announced everything is fine, don’t worry.
$SI have submitted a file delaying their 10-K while updating their “everything is fine, don’t worry” stance to “we might not exist soon.”
Down 57% today, surprised there was no discussion.
SI was my pick in the 2023 contest & I posted a news blurb in the other thread (below). I don't think this one is coming back. I think the thesis of SI as a crypto <-> banking infrastructure play is pretty well pummelled at this point & unlikely to recover.
I haven't exited my small position in it, mainly because I seem to be stupidly stubborn in that way. I have managed to turn my $650 investment into about $150 in a couple of months. At least with a long position I can't go negative!
Question for the more seasoned investors here - what is your protocol for cutting bait on a losing position? (this is in a ROTH IRA, so no option for harvesting losses)
*****
Silvergate's stock plunges as crypto bank warns it may go out of business
12:05 pm ET March 2, 2023 (MarketWatch)
Print
By Steve Gelsi
Silvergate's stock loses 44% of its value as the company delays its financial statements after posting an unaudited loss of nearly $950 million in 2022
Silvergate Capital Corp.'s stock lost more than 40% of its value Thursday after the company delayed its financial statements and said it is evaluating its ability to continue operating for the next 12 months, as the crypto-asset bank scrambles to cover withdrawals tied to the meltdown of the crypto market.
Silvergate (SI) said in a filing that it expects to record further losses related to its impairment on its securities portfolio after selling additional debt securities to cover withdrawals.
Silvergate's stock dropped 44.5% to under $8 a share, a level not seen since March 2020, with at least one analyst downgrading the stock.
Separately,
Coinbase Global Inc. (COIN) said it would stop sending payments to or receiving payments from Silvergate, "in light of recent developments and out of an abundance of caution," the company tweeted Thursday.
Coinbase plans to facilitate institutional client cash transactions with its other banking partners, the company tweeted Thursday.
Coinbase's stock fell nearly 8%, while shares of
Signature Bank (SBNY), another financial-services company that works with digital currencies, fell 5.6%.
Silvergate disclosed in a filing an unaudited loss of $948.7 million in 2022, compared with net income of $75.5 million in 2021. It does not expect to be in a position to file audited results by the extension date of March 16, the company said.
"The company is evaluating the impact that these subsequent events have on its ability to continue as a going concern for the twelve months following the issuance of its financial statements," Silvergate said.
JPMorgan analyst Steven Alexopoulos downgraded Silvergate to underweight from neutral and withdrew a price target for the company.
Silvergate realized $886 million in losses from selling securities as crypto-related deposits fell 68% to $3.8 billion in its fourth quarter, the company announced in January.
"With the company having sold additional securities (beyond what was guided) at a loss in January/February, this reflects that the company is facing continued liquidity challenges," Alexopoulos said.
Wedbush analyst David Chiaverini cut his price target on Silvergate's stock to $9 from $13 and reiterated a neutral rating to reflect a "lack of near-term positive catalysts and [belief] the crypto market could remain suppressed with elevated interest rates for the next couple quarters" until a pause in rate increases by the U.S. Federal Reserve.
"[Silvergate] is managing to a smaller balance sheet to maintain regulatory capital ratios, which could impact its earnings power," he said.
Silvergate listed a number of accounting issues that it is working on, including:
Silvergate's independent registered public accounting firm is requesting details on such matters, and the company is responding to such requests.
Founded in 1988 and based in La Jolla, Calif., Silvergate provides banking and loan services with a focus on financial-infrastructure solutions and services for the digital-currency industry.
MarketWatch writer Frances Yue contributed to this report.
Also read: Feds coach banks on managing crypto liquidity crunches
-Steve Gelsi
I've been wanting to add to my AXON position and just did today as it hangs around 7 month lows.
