The Aftermath: How the Silicon Valley Bank Crash Impacted These Companies

The Silicon Valley Bank collapse caused anxiety in the financial system and shook the tech industry, leaving companies uncertain about their ability to access funds and pay employees. The bank was taken over by the federal government after selling assets and unloading stock to raise money. Many start-ups, tech companies, and venture capitalists were impacted by the fall of this bank.

These companies were affected by the Silicon Valley Bank crash
These companies were affected by the Silicon Valley Bank crash

These companies were affected by the Silicon Valley Bank crash

1. Roku

Roku, a company known for its low-priced streaming devices, disclosed in a filing that it had $487 million, or 26% of its cash, at Silicon Valley Bank as of Friday. The company’s deposits with the bank are largely uninsured, and it is uncertain if they will be able to recover the funds. However, Roku has stated that it has enough money and cash flows to meet its working capital for at least the next year.

2. Circle

Payments-technology firm Circle has disclosed that $3.3 billion of its USD Coin (USDC) cryptocurrency reserves remain at Silicon Valley Bank, out of the $40 billion held. The Boston-based company has called for continuity of the bank in the US economy and will follow guidance provided by regulators. Circle uses the bank for managing 25% of USDC reserves held in cash, but the company has stated that it continues to operate normally while awaiting clarity on how the FDIC receivership of SVB will impact its depositors.

3. Roblox

Roblox, the online gaming platform with metaverse ambitions, disclosed in a filing that about 5% of its $3 billion cash as of February 28 was held at Silicon Valley Bank. The CFO, Michael Guthrie, stated that the bank’s collapse would have no impact on the day-to-day operations of the company. Roblox’s stock closed at $40.05 on Friday, up 0.28% from the previous day.

4. BlockFi

According to a recent bankruptcy filing, the defunct crypto lender BlockFi has $227 million held at Silicon Valley Bank, which is not insured as it is in a money market mutual fund. BlockFi filed for bankruptcy in November 2021 after its CEO, Sam Bankman-Fried, was arrested. Despite Bankman-Fried’s pledge to lend up to $400 million to BlockFi, the company filed for bankruptcy in the US and Bermuda.

5. Compass Coffee

The CEO of a D.C.-based coffee business, Michael Haft, sent an email to employees stating that the company’s payroll was severely impacted by the collapse of Silicon Valley Bank, which did not process the payroll as planned. The coffee company was working to resolve the issue, and employees were expected to receive their payments by Monday. Haft assured employees that the company was taking steps to avoid a similar situation in the future, including changing payroll providers for the next week.

6. Camp

The privately owned toy store, Camp, had most of its company’s cash assets at Silicon Valley Bank which collapsed, co-founder Ben Kaufman said in an email to customers. The New York-based store took to social media for help, urging customers to purchase items from its online sale. It is unclear whether the company’s assets remained at the bank at the time of its collapse.

7. Axsome Therapeutics

Axsome Therapeutics stated that it had “material” cash deposits at Silicon Valley Bank but believed its existing loan and deposits in another bank would be sufficient to continue funding operations, and its stock closed at $58.39, down 5.78% from the previous day.

Several companies have reported that they hold cash deposits at Silicon Valley Bank, which was shut down by regulators due to inadequate capitalization. These companies include Roku, Circle, Roblox, BlockFi, Compass Coffee, and Axsome Therapeutics. Some of the companies have expressed concern about the uninsured deposits, but most have stated that they have sufficient funds to continue their operations. It is unclear how much money these companies have at the bank and what impact the closure of the bank will have on their operations.


Read Aslo :
New Horizons Globalization Partners Review 2023: Insights into Global Employer of Record Services

Leave a Comment