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SVB Stock Price Slides Another 42% Premarket
By Caitlin McCabe
Silicon Valley Bank headquarters in Santa Clara, California.DAVID PAUL MORRIS/BLOOMBERG NEWS
A sharp selloff in shares of SVB Financial Group extended into Friday, dragged down as the bank scrambles to raise fresh capital.
Shares of SVB, the parent of Silicon Valley Bank, tumbled 42% to $61 in premarket trading. On Thursday alone, the stock plummeted 60% in its biggest one-day wipeout in history.
The panic surrounding SVB kicked off Wednesday, when the company said it would book a $1.8 billion after-tax loss on sales of investments and seek to raise $2.25 billion by selling a mix of common and preferred stock.
That prompted fears across the banking sector that other institutions could be forced to take losses to raise cash, with the four biggest U.S. banks losing $52 billion of market value Thursday.
The SVB share sale has yet to complete as of early Friday.
The Wall Street Journal reported Thursday that some venture-capital investors have advised startups to pull their money out of SVB, citing liquidity concerns.
The situation offered the latest glimpse at how higher interest rates are rippling across the financial system. Rising rates have hammered the value of existing bonds that banks hold; at the same time, some banks are seeing customers move their deposits into higher-yielding alternatives such as money-market accounts.
On Friday morning, the fallout in shares of other U.S. banks was relatively contained in premarket trading. Shares of JPMorgan, Bank of America, Wells Fargo and Citigroup each fell by 1.2% or less.