SVB Financial looking to sell itself after capital hike fails - CNBC

By Geoffrey Smith 

Investing.com -- SVB Financial Group (NASDAQ:SIVB) is looking for a buyer, after efforts to raise capital to fill the hole in its balance sheet failed, CNBC reported on Friday, citing people familiar with the matter.

SVB, also known as Silicon Valley Bank, announced on Thursday it would seek an emergency cash injection of $2.25 billion to cover a $1.8B loss on the fire sale of its bond portfolio. Its shares had lost over 60% on the news and fell another 62% in premarket trading on Friday.

SVB, with assets of $212B, would be by far the biggest U.S. bank to fail since the financial crisis a decade ago if it can't find a buyer.

CNBC said that large financial institutions were looking at a possible acquisition, but gave no additional detail.

SVB's problems arose from its corporate client base, many of which are startups with negative cash flows, depleting their reserves at the end of last year as venture capital sources dried up.

SVB had said on Thursday that clients had continued to burn through available at an "elevated" rate in February, defying the bank's expectations of an improvement. It admitted that it expected this trend to continue through the first half, requiring them to draw their deposits with SVB down further.

The pressure on SVB to meet cash requests may also have been increased by a Bloomberg report late on Thursday which claimed that Founders Fund, the VC firm headed by billionaire Peter Thiel, had advised its portfolio companies to pull their money from SVB, fearing that it couldn't survive.

Founders Fund couldn't initially be reached for comment.