We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
US Government Assures Fund Accessibility to SVB (SIVB) Clients
Read MoreHide Full Article
The availability of funds for startups became uncertain after Silicon Valley Bank suddenly collapsed last week, leaving billions of dollars stranded in bank accounts. This resulted in a rout in stock markets, caused by SIVB’s more than 60% fall in share price.
Rumors about massive layoffs in the startup ecosystem were doing the rounds. Another major layoff, following a round of layoffs in the big tech companies, will likely to lead to high unemployment rate, especially for the white-collar employees.
However, U.S. banking regulators, including Secretary of the Treasury, Federal Reserve Board Chair and FDIC Chairman, released a joint statement to allay fears among depositors. In a bid to safeguard the depositors’ interests, the banking regulators started resolution for Silicon Valley Bank and assured that depositors will be able to access funds in their SIVB accounts.
This came as a major relief for startups, which are typically capital-intensive with high labor costs. The funds can now be used to pay salaries and other business funding, removing an overhang for the startups. U.S. banking regulators have also assured that taxpayers will not bear any loss associated with the resolution of the bank.
The FDIC, in its statement, said that customers with funds more than the FDIC-insured limit of $250,000 will have to contact FDIC individually.
Meanwhile, fear remains about a vicious cycle like the 2008 financial crisis that adversely impacted several big banks after the collapse of Lehman Brothers. Several analysts and big investors are raising concern about a similar collapse of the U.S. banking system.
Silicon Valley had approximately $209.0 billion in total assets and about $175.4 billion in total deposits as of Dec 31, 2022. Although the bank’s major customers were tech-based startups, they also included some healthcare startups. Some publicly-listed healthcare companies with SIVB accounts are Editas Medicines (EDIT - Free Report) , Reata Pharmaceuticals and Veracyte.
Editas Medicine is a development-stage genome editing biotech, which makes medicines to treat serious diseases using its proprietary CRISPR technology. The company recently underwent massive strategic reprioritization, where it decided to discontinue internal investments in the company’s IRD programs, including EDIT-101 for Leber Congenital Amaurosis 10 (LCA10) and EDIT-103 for rhodopsin-associated autosomal dominant retinitis pigmentosa (RHO-adRP). Editas Medicine is currently looking for partnerships for the further development of its IRD programs.
Reata Pharmaceuticals is a clinical-stage pharmaceutical company, developing pipeline candidates targeting chronic kidney disease (CKD) and neurological diseases. Reata has started commercial preparation to support the launch of one of its leading candidates, omaveloxolone, as a Friedreich's ataxia (FA) therapy. The company plans to file a regulatory application, seeking approval for omaveloxolone as a treatment for FA patients in Europe in early 2023. Please note that omaveloxolone was approved by the FDA as an FA therapy last month.
Preferred Bank (PFBC - Free Report) is a better-ranked stock from the banking sector, carrying a Zacks Rank #2 (Buy) at present. It has an estimated earnings growth rate of 15% for 2023. PFBC’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 6.67%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
US Government Assures Fund Accessibility to SVB (SIVB) Clients
The availability of funds for startups became uncertain after Silicon Valley Bank suddenly collapsed last week, leaving billions of dollars stranded in bank accounts. This resulted in a rout in stock markets, caused by SIVB’s more than 60% fall in share price.
Rumors about massive layoffs in the startup ecosystem were doing the rounds. Another major layoff, following a round of layoffs in the big tech companies, will likely to lead to high unemployment rate, especially for the white-collar employees.
However, U.S. banking regulators, including Secretary of the Treasury, Federal Reserve Board Chair and FDIC Chairman, released a joint statement to allay fears among depositors. In a bid to safeguard the depositors’ interests, the banking regulators started resolution for Silicon Valley Bank and assured that depositors will be able to access funds in their SIVB accounts.
This came as a major relief for startups, which are typically capital-intensive with high labor costs. The funds can now be used to pay salaries and other business funding, removing an overhang for the startups. U.S. banking regulators have also assured that taxpayers will not bear any loss associated with the resolution of the bank.
The FDIC, in its statement, said that customers with funds more than the FDIC-insured limit of $250,000 will have to contact FDIC individually.
Meanwhile, fear remains about a vicious cycle like the 2008 financial crisis that adversely impacted several big banks after the collapse of Lehman Brothers. Several analysts and big investors are raising concern about a similar collapse of the U.S. banking system.
SVB Financial Group Price
SVB Financial Group price | SVB Financial Group Quote
SIVB in Healthcare
Silicon Valley had approximately $209.0 billion in total assets and about $175.4 billion in total deposits as of Dec 31, 2022. Although the bank’s major customers were tech-based startups, they also included some healthcare startups. Some publicly-listed healthcare companies with SIVB accounts are Editas Medicines (EDIT - Free Report) , Reata Pharmaceuticals and Veracyte.
Editas Medicine is a development-stage genome editing biotech, which makes medicines to treat serious diseases using its proprietary CRISPR technology. The company recently underwent massive strategic reprioritization, where it decided to discontinue internal investments in the company’s IRD programs, including EDIT-101 for Leber Congenital Amaurosis 10 (LCA10) and EDIT-103 for rhodopsin-associated autosomal dominant retinitis pigmentosa (RHO-adRP). Editas Medicine is currently looking for partnerships for the further development of its IRD programs.
Reata Pharmaceuticals is a clinical-stage pharmaceutical company, developing pipeline candidates targeting chronic kidney disease (CKD) and neurological diseases. Reata has started commercial preparation to support the launch of one of its leading candidates, omaveloxolone, as a Friedreich's ataxia (FA) therapy. The company plans to file a regulatory application, seeking approval for omaveloxolone as a treatment for FA patients in Europe in early 2023. Please note that omaveloxolone was approved by the FDA as an FA therapy last month.
Zacks Rank & Stock to Consider
Silicon Valley Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Preferred Bank (PFBC - Free Report) is a better-ranked stock from the banking sector, carrying a Zacks Rank #2 (Buy) at present. It has an estimated earnings growth rate of 15% for 2023. PFBC’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 6.67%.