There might be some hope for Silicon Valley Bank to spring back to life.
Twitter and Tesla big boss Elon Musk hinted at the possibility of the social media behemoth purchasing the beleaguered Silicon Valley Bank.
“I think Twitter should buy SVB and become a digital bank,” tweeted Min-Liang Tan in the face of the ongoing chaos. Tan is cofounder and CEO of Razer, a company that sells gaming computers.
Elon Musk responded to Tan’s tweet by stating:
“I’m open to the idea.”
On Friday, US regulators announced the closure of Silicon Valley Bank and seized all of the institution’s assets.
I think Twitter should buy SVB and become a digital bank.
— Min-Liang Tan (@minliangtan) March 11, 2023
Silicon Valley Bank Implosion Rattles Global Markets
The move, which makes SVB the largest retail bank to fail since 2008, shook global markets and left billions of assets belonging to firms and investors stranded.
On the same day, startup founders withdrew assets in response to the bank’s dropping stock price following a capital raising announcement on Thursday evening.
One Twitter user supported Musk’s proposal, stating “What an opportunity!” However, another individual named Sanjay replied, “And sell another $20 billion in Tesla stock.” No thanks!”
The largest US bank failure since the 2008 Great Recession pushed Wall Street traders into frenzy. Source: Getty Images
The impact of Elon Musk’s tweets on the stock market, cryptocurrency prices, and public opinion of his enterprises can be substantial.
The billionaire’s tweets frequently draw broad media attention, and his comments can cause large price fluctuations in equities and cryptocurrencies.
In addition, his tweets can influence the public’s perception of his firms, such as Tesla and SpaceX.
Musk’s tweets, however, have also been the topic of controversy, with some criticizing his use of Twitter to make announcements or offer thoughts that may not be carefully researched or thoroughly weighed.
Experts Warn SVB Demise May Not Be An Isolated Incident
Meanwhile, SVB’s shares in New York fell 60% and trading was halted before California regulators announced the bank’s liquidation.
The California Department of Financial Protection and Innovation shut down SVB and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
Financial analysts warn that the abrupt implosion of SVB, a four-year-old American lender and a pillar of the tech startup sector, may not be an isolated incident, and that clients and investors should prepare for the next domino to fall.
In a video address to staff, SVB CEO Greg Becker indicated that he is working with banking regulators “to identify a partner for the bank.” He emphasized that there is no assurance that an agreement will be reached.
According to news accounts, SVB, the 16th largest bank in the United States with a total of 17 branches across California and Massachusetts, primarily served tech customers and venture capital-backed enterprises, including some of the industry’s most popular brands.
Crypto total market cap currently at $923 billion on the weekend chart | Chart: TradingView.com
Searching For Ways To Rescue SVB
At the time of writing, Reuters reported, citing Bloomberg News, on Saturday that the administrators of Silicon Valley Bank’s investment banking unit, SVB Securities, are seeking methods to buy the failed lender back from its parent firm.
Jeff Leerink, CEO of SVB Securities, and his team are seeking funding for a prospective management buyout of the company, according to a report quoting individuals familiar with the situation.
Bitcoin was little changed after news of SVB’s implosion, trading at $20,404 at the time of writing Sunday, data from crypto market tracker Coingecko shows.
-Featured image from Mirchi9