• Silvergate Capital Corp (NYSE: SI) saw their stock fall 50% on Thursday after they delayed the submission of their annual 10-K report.
• JPMorgan downgraded Silvergate stock to underweight and analysts at Canaccord Genuity also downgraded it.
• Coinbase announced that it had stopped payments to or from the crypto bank, likely due to liquidity challenges.
Silvergate Capital Stock Plummets
Silvergate Capital Corp (NYSE: SI) saw its stock plummet by nearly 50% on Thursday morning after a filing with the U.S Securities and Exchange Commission (SEC) revealed that the company was assessing its ability to continue as a going concern. This came after the FTX fiasco in early November, where Silvergate had to offload more assets than expected in order to maintain capital ratio.
Downgrades From JPMorgan and Canaccord Genuity
JPMorgan analyst Steven Alexopoulos downgraded the financial services company to „underweight“ citing continued liquidity challenges. Canaccord Genuity also downgraded Silvergate stock on Thursday and trimmed their price target o $9 per share.
Coinbase Stops Payments To/From Crypto Bank
In addition, Coinbase announced today that it had stopped payments to or from the crypto bank due to liquidity issues. This added further pressure on Silvergate’s already weakened state, putting it 65% lower than its year-to-date high mark set earlier this year before the FTX fiasco occurred.
Q4 Losses for Silvergate Capital
The latest reported quarter for Silvergate showed $1 billion in losses which could be attributed partly due to a “bank run of sorts” with greater than expected deposit outflows during Q4 2020.
Overall, Silvergate has been dealing with multiple issues over the past 2 months which have caused significant damage not only in terms of its balance sheet but also public opinion of its practices and reliability as an institution responsible for managing customer funds safely and securely.