SVB, aka Silicon Valley Bank, plunged 47% Thursday after announcing a multi-billion dollar equity offering and a transaction to sell tens of billions of dollars worth of securities at a loss.Late Wednesday, SVB said it will embark on a $1.75B share sale, made up of $1.25B of its common stock and $500 million of depositary shares.
Morgan Stanley analysts said lower 2023 NII guidance at SVB is driven by cash burn among private companies that bank with SVB. This, according to the analysts, will cause SIVB to bring more higher-cost sweep accounts onto its balance sheet, paying roughly the Fed funds rate to do so. "The Silicon Valley raise got everybody nervous about people's capital levels and what deposits are doing. A lot of institutional investors don't feel great about owning certain banks right now," Keefe, Bruyette & Woods told Reuters.
This should be main article of day, tomorrow is D day.
Yesterday Powell was told by a 👸🏿 to cut rates if you remember he responded with Higher for longer till we take out the trash.
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