Topline
The CEO of Silicon Valley Bank Financial sold $3.6 million in stock two weeks before the California banking giant’s epic crash Friday, signaling bank officials might have known the bank was in trouble before it reported a nearly $2 billion loss that led to the biggest bank failure since the Great Recession in 2008.
The CEO of Silicon Valley Bank reportedly sold $3.6 million in shares late last month, before the … [+]
Key Facts
Greg Becker, the CEO of SVB Financial—the parent of SVB—sold nearly 12,500 shares for $287 each on February 27, making $3.6 million in return.
News of the sale was first broken by Barrons Friday afternoon, just hours after California’s financial regulator closed the bank, telling insured depositors they will have full access to their deposits by Monday morning.
Becker also acquired the same number of shares at a significantly lower price of $105.18 per share, according to a Securities and Exchange Commission filing (SVB did not immediately respond to a Forbes inquiry for comment).
The Santa Clara, California-based bank had been trying to raise capital, and then pivoting to try and find a buyer, with its parent company SVB Financial Group on Friday hiring advisors to pursue a potential sale, following its announcement Thursday it had lost $1.8 billion after selling $21 billion in securities.
News Peg
SVB Financial shares were halted Friday morning following a massive pre-market selloff that had resulted in shares plunging 64% in pre-market trading by 8 a.m., hitting a low of $34.
Key Background
SVB announced Thursday it had suffered a tax loss of roughly $1.8 billion, after it sold approximately $21 billion of securities in an attempt to raise cash quickly amid challenging market conditions. It also announced plans to raise $2.25 billion through the sale of common and preferred stock. Hours later, venture capital firm Founders Fund advised companies it backed to withdraw money from SVB, Bloomberg reported, while some founders moved their money from SVB to other firms, including Brex and First Republic.
Big Number
345. That’s how far the Dow Jones industrial average fell on Friday, to a four-month low of 31,910, finishing its worst week this year, as the collapse of SVB created a ripple effect on other regional and mid-sized banks. The Dow has now dropped by nearly 1,500 points this week (roughly 4%), while the tech-heavy Nasdaq dropped by 1.8% and the S&P 500 fell by 1.4%.
Further Reading
SVB Shut Down By California Regulator After Bank Stocks Crash Amid Turmoil (Forbes)
Dow Plunges Nearly 1,500 Points In Worst Week Since June As Bank Stocks Collapse (Forbes)
What To Know About Silicon Valley Bank’s Collapse—The Biggest Bank Failure Since 2008 (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2023/03/10/svb-financial-ceo-sold-36-million-in-stock-before-banks-collapse/