Silvergate stock crashed 50% on Thursday: here’s why

  • Silvergate Capital has delayed filing its annual 10-K report.
  • JP Morgan today downgraded Silvergate to underweight.
  • Silvergate Capital is now down 65% from its year-to-date high.

Silvergate Capital Corp (NYSE: SI) was cut nearly in half this morning after delaying the filing of its annual 10-K report.

What Silvergate said in the SEC filing

Crypto banks face their next existential crisis. FTX debacle Early November. Silvergate Capital said on Tuesday: filing U.S. Securities and Exchange Commission (SEC):

We assess our ability to continue as a going concern [and] is in the process of reassessing its business and strategy in light of the business and regulatory challenges it faces today.

The lender also confirmed that it has had to offload more assets than expected in the past two months. This can put pressure on capital adequacy ratios. Silvergate’s stock is now down about 65% from its year-to-date high.

Silvergate Stock Receives Multiple Rating Downgrades

Also on Thursday, JP Morgan analyst Stephen Alexopoulos downgraded the financial services company to ‘underweight’, citing continued liquidity problems.

Against the backdrop of a difficult environment, short sellers appear to have contributed to a bank run of sorts, with Silvergate reporting much higher than expected levels of deposit outflows in the fourth quarter, which is likely to continue. increase.

among them Most recently reported quarterSilvergate Capital suffered a loss of $1 billion.

coinbase too announced That I stopped making payments to or from crypto banks today. Canaccord Genuity analysts also downgraded Silvergate shares on Thursday, lowering his price target to $9.0 a share.

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