Tesla CEO and Twitter’s new owner Elon Musk recently said that he is “open to the idea” of buying US-based lender Silicon Valley Bank (SVB).
Business Insider reports that in response to a recent tweet, Twitter owner and Tesla CEO Elon Musk said he was “open to the idea” of buying the Silicon Valley bank after a US regulator said it was running on deposits. Cause The reason was the closure of the financial institution.
by customers. While some social media users have supported the idea, Tesla investors have raised objections. The founders of the startup began withdrawing money from SVB on Thursday as a result of a fall in the bank’s share price following the capital raising announcement on Wednesday night. The fact that the receiver is now in charge of the bank can seriously delay access to deposits.
The collapse of the Silicon Valley bank was caused by a massive run on the bank, with customers beginning to withdraw $42 billion this week. The bank was placed into Federal Deposit Insurance Corp receivership on Friday after the California Department of Financial Protection and Innovation (DFPI) declared the bank bankrupt.
According to DFPI, prior to the bank run, the bank was in “good financial condition”. Customers withdrew $42 billion, leaving the bank with a negative cash balance of $958 million. Here is a summary of what happened with the DFPI’s order to take control of the bank: “On March 8, 2023, the bank recovered losses of approximately $1.8 billion from the sale of declared investments (US Treasuries and mortgage-backed securities) made recovery of On March 8, 2023, the bank’s holding company announced it was raising capital.
Despite the bank’s financial condition being sound before March 9, 2023, investors and depositors began withdrawing $42 billion in deposits from the bank on March 9, 2023, affecting the bank. As of the close of business on March 9, the bank had a negative cash balance of approximately $958 million. Despite the bank’s efforts with the help of regulators to move collateral from various sources, the bank did not complete its cash letter with the Federal Reserve.
The early deposit withdrawals have left the bank unable to pay its obligations when due, and the bank is now insolvent. Prior to its collapse, the Silicon Valley bank was the 16th largest bank by assets in US Federal Reserve data, which showed the bank had $209 billion in assets as of December 31, 2022.
Min-Liang Tan, co-founder and CEO of Razer, a company that sells gaming computers and peripherals, tweeted: “I think Twitter should buy SVB and become a digital bank.” Musk replied: “I’m open to the idea.”
One Twitter user supported the idea, stating “what an opportunity”. But another Twitter user and Tesla investor named Sanjay, whose Twitter profile describes him as a “Tesla customer and investor, Bullock and Elon fan,” added: “And sell $20 billion dollars worth of Tesla stock.” No, thank you!”
Tesla’s share price was negatively affected last year by Musk’s series of Tesla stock sales to pay for Twitter purchases. They sold $8.5 billion in April, $6.9 billion in August, $3.95 billion in November and $3.6 billion in December for a total of nearly $23 billion in sales.