Silicon Valley Bank parent SVB Financial faces 'perfect storm,' analyst Dick Bove says - Silicon Valley Business Journal

SVB Financial Group, which has already seen its shares lose two-thirds of their value this year, faces more trouble ahead as Silicon Valley's recovery doesn't appear likely anytime soon.

"The perfect storm has now developed for the company," Bove of Odeon Capital Group told clients Oct. 28, saying that a fundamental change is underway as Silicon Valley companies may have to shift their focus from technology-based products and services for consumers to those designed for businesses. "We continue to see strength and momentum in our underlying business, despite persistent market challenges affecting liquidity flows to private companies, rising rates and fear of recession," Greg Becker, president and CEO of SVB Financial, said in releasing third-quarter results last month.

Bove, who has a"hold" rating on SVB, expects a moderate recession as the Fed continues to tighten. He expects the bank's low-cost deposits to fall as startups burn through their cash or transfer money into higher-yielding investments. More than half of SVB's deposits — 57% — don't earn interest, Bove said, adding that another hit could come from warrants the bank gets as part of its lending activities ultimately proving worthless.

Ireland Ireland Latest News, Ireland Ireland Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

John Deere-owned Blue River pays $85M for Silicon Valley office building - Silicon Valley Business JournalThe building, which is positioned between two of Silicon Valley's biggest office campuses, was bought by Blue River Technology Inc., a part of farm equipment giant Deere & Co.
Source: svbizjournal - 🏆 334. / 59 Read more »

Silicon Valley Business Journal seeks nominations for Power 100 list - Silicon Valley Business JournalEarly next year, the Journal will be unveiling the Power 100, a list of Silicon Valley's 100 most important and influential people. We need your help finding them.
Source: svbizjournal - 🏆 334. / 59 Read more »

Here's why SJC could see a boost in Southwest flights - Silicon Valley Business JournalSJC is one of 11 big airports where Southwest is still below 2019 levels
Source: svbizjournal - 🏆 334. / 59 Read more »

Here's why SJC could see a boost in Southwest flights - Silicon Valley Business JournalSJC is one of 11 big airports where Southwest is still below 2019 levels
Source: svbizjournal - 🏆 334. / 59 Read more »

Bright Machines raises $132 million 10 months after spiking merger plan - Silicon Valley Business JournalThe manufacturing equipment startup raised the new funding in a combined equity-and-debt deal.
Source: svbizjournal - 🏆 334. / 59 Read more »