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CFCYYZ t1_jbr2031 wrote

Rocket Lab has $38M on deposit with SVB or 7.9% of their total cash on hand. That is not chump change, it is a launch. They should come out bruised but OK. It's the small fry that will be hit hardest. Good luck Out There!

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coweatyou t1_jbrlv0d wrote

They are lucky they already have 4+ years of runway, they can afford to loose access to a little more than 5 months of burn at this point (most of the depositors will get some to most of their money out via asset sales, it just might take time to set up the sales). It's going to be the little(er) guys who don't have that sort of runway that might be in real trouble.

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RunTheBull13 t1_jbqsd5a wrote

This sounds like it's going to cause many cascading issues.

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Adeldor t1_jbqyx8k wrote

I heard on the news today there was a bank run on SVB. Such do indeed have a history of cascading.

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[deleted] t1_jbtgvsp wrote

Crazy how everyone’s favorite shill Jim C said to buy it a month ago.

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ShittyBeatlesFCPres t1_jbtriww wrote

I think it’s very likely SVB gets absorbed by a larger bank and uninsured depositors get made whole. It’s not guaranteed but usually banks go into receivership on a Friday and by Monday a larger bank has snatched them up. SVB’s collapse looks like a traditional bank run and it’s balance sheet is apparently super conservative. You never know. They could find out something awful this weekend. But the problem (at least as I understand it) was basically that it didn’t have a diversified depositor base and because interest rates have rose, couldn’t sell their bond assets quickly, not that they had risky investments and there’s no valuable assets.

The other scenario is that they can’t find an immediate buyer for all their assets/liabilities and the bank is basically wound down over time. The uninsured depositors might even get 100% back in that scenario but it’ll take time and probably won’t be 100%. It seems very likely there will be buyers, though. It wouldn’t have been insolvent as a division of a larger bank.

I guess a third option is shenanigans. We don’t know what the FDIC is learning this weekend. Shenanigans can always be afoot but there’s no indication the bank president used deposits for NFTs or something else dumb and illegal.

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