• Silvergate Capital Corp (NYSE: SI) stock dropped nearly 50% on Thursday after it delayed the submission of its annual 10-K report and JPMorgan downgraded it to “underweight”.
• The crypto bank is facing an existential crisis following the FTX fiasco in early November and has had to offload more assets than expected over the past two months.
• Coinbase also announced today that it had stopped payments to or from the crypto bank.
Silvergate Stock Crashes 50%: Here’s Why
Silvergate Capital Corp (NYSE: SI) was cut nearly in half this morning after it delayed the submission of its annual 10-K report.
Existential Crisis Following FTX Fiasco
The crypto bank is facing an existential crisis following the FTX fiasco in early November. On Tuesday, Silvergate Capital said in a filing with the U.S. Securities and Exchange Commission (SEC): The Company is evaluating its ability to continue as a going concern [and] is in the process of reevaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.
The lender also confirmed that it had to offload more assets than expected over the past two months, which could weigh on its capital ratio.
Downgrades From JPMorgan & Canaccord Genuity
Also on Thursday, JPMorgan analyst Steven Alexopoulos downgraded the financial services company to „underweight“ citing continued liquidity challenges.
„In the backdrop of challenged environment, short-sellers appear to have contributed to a bank-run of sorts with Silvergate reporting a much greater level of deposit outflows than anticipated in Q4 and this likely continuing,“ Alexopoulos wrote.
In its latest reported quarter, Silvergate Capital had $1.0 billion of loss.
Coinbase Also Halts Payments
Coinbase Stops Payments To/From Crypto Bank
Coinbase also announced today that it had stopped payments to or from Silvergate Capital. Analysts at Canaccord Genuity also downgraded Silvergate stock on Thursday and trimmed their price target o $9.0 a share.