The real question is why did everyone want the money out of Silicon Valley Bank all at once? Was it just the warning that Peter Theil sent or is there a really big cash crunch problem in Silicon Valley?
Discussion
SVB announced they were trying to raise money by issuing more shares (a stock dilution) because they cut loose a whole bunch of US T-Bills due to interest rates causing a huge gaping hole of loss on their balance sheet.
That freaked people out and rightly so.
the bank was failing before the run
really? seems like it had a mark to market problem similar to every other bank and definitely illiquid but not insolvent
without the run none of this would have occurred. so again, why the run? https://www.zerohedge.com/markets/record-bank-run-drained-quarter-or-42-billion-svbs-deposits-hours-leaving-it-negative-1bn
but they sold treasuries to cover withdrawals already taking place. who needed cash that bad to start the need to sell treasuries
from what I understand, and I'm just a pleb, the treasuries had a massive loss in value because interest rates changed and no one wanted them anymore
so VC's that had normal cash flow needs asked for more money than was available at the time