Silicon Valley Bank Collapses on Cash Crunch

<p>SVB Financial&comma; the holding company for Silicon Valley Bank&comma; saw its stock collapse Thursday after announcing a stock sale and capital raise&period;<&sol;p>&NewLine;<p>Shares plummeted &dollar;160 or 60&percnt; on Thursday as investors rushed to sell and also plummeted on Friday morning leading to a halt in trading&period;<&sol;p>&NewLine;<p>The problems started Thursday when SVB Financial announced it would sell &dollar;1&period;25 billion in common stock and another &dollar;500 million in preferred stock to shore up its balance sheet&period; The company said investment firm General Atlantic would purchase &dollar;500 million in common stock from the company&period; SVB also sold its entire securities portfolio for &dollar;21 billion&comma; leading to a &dollar;1&period;2 billion loss for the quarter&period;<&sol;p>&NewLine;<p>Silicon Valley Bank&comma; based in Santa Clara&comma; is the leading bank in the area for venture capital firms and start-up companies&period; News of the bank&&num;8217&semi;s problems have led to clients moving their money as fast as possible&period;<&sol;p>&NewLine;<p>Bloomberg reports that Peter Thiel&&num;8217&semi;s Founders Fund has urged its portfolio companies to move money out of Silicon Valley Bank&period; Other venture capital firms are also recommending that their companies also move their funds according to Bloomberg&period;<&sol;p>&NewLine;<p>CNBC reports that SVB Financial is looking to sell the company as the run on its bank are dooming its survival&period; Unless the federal government steps in to guarantee the bank&&num;8217&semi;s liquidity&comma; customers will likely continue to withdraw their money&period;<&sol;p>&NewLine;<p>&nbsp&semi;<&sol;p>&NewLine;

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