The collapse of the Silicon Valley Bank, which is held by SVB Finance Group SIVB has sent shockwaves through the markets. On Thursday, as the stock market digested SVB’s disclosure about the need to shore up its capital with a share offering, its stock fell, leading other regional bank stocks to fall as the broader market fell on Friday.
Here are some voices heard on Wall Street on the Regional Bank’s downfall:
Burry increases Specter Of Enron, Worldcom: Great Short Fame Michael Burry, who is known for his infamously cryptic tweets on Thursday tweeted this “It’s possible we found our Enron today.” Referring to the energy company that went bankrupt after an accounting scandal. The tweet has since been deleted.
In a forward-looking tweet on Friday, which was also deleted, Burry said: “Next we find our Worldcom. Patience.”
Worldcom, once the second largest long-distance phone company, has been accused of faking accounts to inflate profits. When the accounting scandal became known, she had to file for bankruptcy in July 2002.
See also: What to do if the stock market crashes?
Chanos Slams VC Community: Jim Chanos announced the FDIC’s order to take possession of the bank, after which investors and depositors arranged for $42 billion of deposit withdrawals from the SVB on Thursday.
“This is staggering. $42 billion was probably a quarter of their deposit base as of Wednesday night,” he said. In a separate tweet, he noted that public companies with uninsured deposits at the bank would soon have to make some “awkward disclosures.”
Chanos also took offense at calls from the VC community for the Fed to bail out the bank. While noting that the VC community started the run Thursday by asking its portfolio companies to withdraw their deposits, he said they wanted “the taxpayer to bail out their investments.” “Silicon Valley-style capitalism.”
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