Elon Musk to buy Silicon Valley Bank after collapse, “I’m open to the idea”
Tesla and Twitter CEO Elon Musk said he is open to the idea of buying the collapsed Silicon Valley Bank (SVB) and turning it into a digital bank. Musk made the revelation while responding to a tweet by Min-Liang Tan, co-founder and CEO of Razer who tweeted, ”I think Twitter should buy SVB and become a digital bank”.
Replying to Min-Liang Tan’s tweet, Musk replied, ” I’m open to the idea”.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
The sudden collapse of Silicon Valley Bank (SVB) has sent panic waves to thousands of startups and venture capital firms. Within 48 hours, a panic induced by the very venture capital community that SVB was created to serve and cared for ended the bank’s40-year run.
Meanwhile, there are new reports that the CEO of Silicon Valley Bank sold over $3 million worth of stock over the last two weeks before the bank’s collapse. According to a filing with the US Securities and Exchange Commission (SEC), Silicon Valley Bank CEO Greg Becker sold $3.57 million worth of stocks — which amounted to nearly 12,500 shares — in a pre-planned, automated sell-off on Feb. 27.
— unusual_whales (@unusual_whales) March 10, 2023
The collapse also has investors worried about a recession event similar to the 2008 financial crisis.
Silicon Valley Bank’s downward spiral began late Wednesday after the bank surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet. Within 48 hours, a panic induced by the very venture capital community that SVB was created to serve and cared for ended.
After a 40-year run, the bank ceased operations on Friday, making it the largest banking failure since the 2008 financial crisis and the second-largest ever. On the same day, the US regulators seized control of the bank. The unraveling at SVB will have far-reaching implications for U.S. venture-backed startups, half of which did business at the bank, and also for the broader tech ecosystem.
Now, venture capital firms are urging tech startups and companies in their portfolio companies to move money out of embattled lender Silicon Valley Bank. On Friday, the trading of SVB Financial Group’s shares, the holding company of Silicon Valley Bank, was suspended due to a significant drop in the pre-market session. The bank was in a rush to raise new funds amid this steep decline.
The company’s stock experienced its largest single-day crash in history, plummeting by 60%. Prior to the suspension, heavy premarket trading caused the stock to tumble 68% to approximately $34.
The alarm bells for SVB started ringing on Wednesday when the company announced its plan to sell a combination of common and preferred stock and to incur an after-tax loss of $1.8 billion from the sales of its investments.