in financial filed documents on fridayRoku revealed it owed about $487 million to Silicon Valley Bank, the Northern California financial powerhouse that failed this week, jolting the entire region’s economy.
That number, Roku says, represents about 26% of its cash and cash equivalents, and the company will be able to meet its pending financial obligations for at least “the next 12 months and beyond.”
The Santa Clara-based Silicon Valley bank was shut down by the California Department of Financial Protection and Innovation on Friday, a spectacular and swift end to one of the pillars of financing in the white hot tech industry economy for decades.
It’s a complicated and still developing story but what is known is that on Wednesday, The bank told investors it needed to raise just over $2 billion To offset $1.8 billion in losses from investments in mortgage-backed securities that were devalued to the Fed decision to increase interest rates,
the next day, in described by an investor “A Hysteria-Induced Bank Run,” Dozens of SVB’s Venture Capital Clients urged by, among others, a venture capital fund founded by billionaire Peter Thiel – Started withdrawing his assets from the bank.
this customer finally A staggering $42 billion was withdrawn by the end of the day, according to California Regulatory Filingand as a result SVB has a negative cash balance of $958 million. regulator closed the bank and confiscated its assets Friday morning. Overall, the bank’s journey from Silicon Valley institution to the second largest bank failure in US history took less than 48 hours.
The bank and its assets are now held by the Federal Deposit Insurance Corporation; The FDIC insures all bank deposits in the United States up to $250,000, and the agency said on Friday That all insured customers should expect to get their money back by Monday, March 13.
But carrying bags is a bigger problem for bank customers. S&P Global Market Intelligence estimates Only 2.7% of bank deposits were at or below the $250,000 limit.
However, the FDIC is likely to find a buyer for the bank and its assets, which could address the problems faced by customers who hold too many deposits. Despite declaring bankruptcy, the Silicon Valley bank still had hundreds of billions of dollars in other assets. 212 billion dollars till 31 DecemberHowever, there is likely to be little till now.
But the FDIC has the authority to recover the maximum amount possible; Bloomberg Note that there is a good chance that the bank and its assets could be sold for more than the total amount of uninsured deposits.
In its filing Friday, Roku said it had “total cash and cash equivalents of approximately $1.9 billion” as of March 10 and that “approximately $1.4 billion of the company’s cash and cash equivalents is distributed among several large financial institutions.” ” As a result, Roku said, “Despite the closing of SVB, the company believes that its current cash and cash equivalent balances and cash flows from operations will be sufficient to meet its working capital, capital expenditures and physical cash requirements.” Known contractual obligations for the next 12 months and beyond.
