SVB Financial stock plummets toward biggest one-day selloff in 23 years after stock offering, large losses on securities sales

Shares of SVB Financial Group
SIVB,
+0.16%
plummeted 30.6% to pace all of the S&P 500’s
SPX,
+0.14%
premarket losers on Thursday, which puts them on track for the worst one-day performance in 23 years, after the banking services company announced a stock offering and a large loss from the sale of assets. The company said late Wednesday that it plans to sell $1.25 billion worth of common stock, which represents 7.9% of the company’s market capitalization of $15.8 billion as of Wednesday’s close, and $500 million worth of mandatory convertible preferred stock. SVB said it has entered into an agreement with equity investor General Atlantic to buy $500 million of common stock in a separate private transaction. Separately, SVB said it completed the sale of substantially all of its securities portfolio available for sale, with the $21 billion of securities sold resulting in a loss of approximately $1.8 billion in the first quarter of 2023. The current FactSet consensus is for first-quarter net income of $274.8 million. The stock, which is set to open at the lowest price seen since May 2020, had run up 21.6% over the past three months through Wednesday, while the S&P 500
SPX,
+0.14%
has gained 1.5%.