SVB Financial Group SIVB is for sale.
According to CNBC’s David Faber, the parent of Silicon Valley Bank has failed to raise enough capital to continue and is being shopped around by bankers.
The news comes on the heels of SVB’s attempt to sell $1.25 billion in common stock and another $500 million of convertible preferred shares.
SVB’s issues took a toll on other banks. When investors dumped the stock Thursday, it led to a plummet in market value for the likes of PacWest Bancorp PACW, which fell 25%; First Republic Bank FRC, which lost 17%; Charles Schwab Corp. SCHW, which fell 13%; U.S. Bancorp USB, which lost 7%; and JPMorgan Chase & Co. JPM, which fell 5.4%.
The company previously disclosed of an agreement with investment firm General Atlantic to sell $500 million of common stock. Yet that deal was contingent on the closing of the other common stock offering, per a regulatory filing.
SVB is a major bank for venture-backed companies, and it cited cash burn from clients as one reason it was looking to raise additional capital.
SVB’s troubles underscore the difficulty companies face as of late due to escalating interest rates and a looming recession.
CenterView Partners and Sullivan & Cromwell are advising SVB on the sale process, according to the Wall Street Journal.
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