
- Silvergate Capital Corp suspends dividends on preferred stock.
- Analysts at Wedbush Securities reiterate their neutral rating for ‘SI’.
- Silvergate’s stock is now down more than 85% since mid-August.
Silvergate Capital Corp closed down 5.0% on Friday after the crypto bank suspended its preferred stock dividend.
Silvergate seeks to preserve capital
A struggling digital currency service company is cutting payments to preserve capital.this is Press release read:
This decision reflects our focus on maintaining a liquid balance sheet with a strong capital base. The company continues to maintain a cash position over customer-related deposits in digital assets.
The California-based company also confirmed that its board of directors will reassess quarterly payments once market conditions improve.
Silvergate’s stock has fallen more than 85% since mid-August, partly linked to the FTX collapse.As a result, billionaire investors Cathy Wood Almost completely withdrawn at the beginning of the new year.
Should you buy Silvergate stock?
Analysts at Wedbush Securities say suspending dividends on Series A preferred stock will prove more difficult in the long run for the financial infrastructure solutions company.
Reiterating his “neutral” rating for Silvergate shares on Friday, David Chiavellini said:
We believe this move may increase Silvergate’s cost of capital in the future as it seeks to tap into the capital markets for future capital raising. New bonds or priority issues require higher coupons.
His $13 stock price target suggests the stock has absolutely no upside potential. As Coin Journal reported here, at the beginning of January Silvergate Capital Corp said average customer deposits of digital assets fell 39% in the fourth quarter to $7.3 billion.