After The Company Delays Its Annual Report And Reveals New Losses, Silvergate Stock Falls
After The Company Delays Its Annual Report And Reveals New Losses, Silvergate Stock Falls

After The Company Delays Its Annual Report And Reveals New Losses, Silvergate Stock Falls

Shares of the ailing lender Silvergate (SI) dropped by 57% on Thursday after the business announced late the previous night that it will miss a deadline on March 16 to complete its annual report that has previously been delayed.

According to a statement released by the bank, its team “needs additional time to do analysis, record journal entries relating to later occurrences, and to complete management’s examination of internal controls over financial reporting.”

The company added-

“The Company is currently analyzing certain regulatory and other inquiries and investigations that are pending with respect to the Company”

After The Company Delays Its Annual Report And Reveals New Losses, Silvergate Stock Falls
After The Company Delays Its Annual Report And Reveals New Losses, Silvergate Stock Falls 

Shares of Silvergate have plummeted over the course of the past year due to the fact that the company was involved with a number of other cryptocurrency businesses, including the now-defunct exchange FTX, which led to a decline in deposits of over two-thirds during the final three months of the previous year.

In January, the corporation terminated the jobs of forty percent of its workforce. While the corporation worked to strengthen its cash position, it eventually decided to stop paying dividends on preferred shares. The stock of the bank has dropped by more than 95% during the course of the past year.

A spokesperson for Silvergate told Yahoo Finance: “Silvergate is working diligently to file its 10-K as soon as possible and has no further comment at this time.”

A Silvergate representative told Yahoo Finance, “Silvergate is working hard to file its 10-K as soon as possible. At this time, Silvergate has nothing else to say.” In a notice sent out on Wednesday, the bank said it sold more debt securities than expected in January and February, and it expects to report more losses than what was already known. In January, the company said it had non-interest losses of $887 million in the fourth quarter.

Silvergate said that most of the money from the sales will be used to pay back “outstanding advances” from the Federal Home Loan Bank of San Francisco. The bank also needs more time so that its third party accounting firm can finish a “evaluation of the effectiveness of its internal controls over financial reporting.”

The company is figuring out how much the changes might affect its “ability to continue as a going concern for the twelve months following the issuance of these financial statements,” according to a filing. The company is doing this because of problems with business and rules.

Late in January, a group of U.S. Senators from both parties asked the company if it knew that its client FTX had misused customer funds. In February, Reuters said that a Silvergate account run by Binance. The US sent a lot of money to a company that Binance CEO Changpeng Zhao runs.

The Federal Reserve made it a point to highlight the increased liquidity risks for banks that take on clients related to cryptocurrencies in a statement that was issued jointly with the Federal Deposit and Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) just the week before.

Silvergate pointed to “heightened regulatory scrutiny of banking institutions that supply products and services to the digital asset business,” private lawsuits, and investigations from congressional probes, banking regulators, and the Justice Department as examples of the company’s own dangers.

In a note published on Thursday, analysts at JPMorgan downgraded the stock from Neutral to Underweight and withdrew their price target. They described the situation as “highly unusual” and added that the “run” experienced at Silvergate appears to have been driven by a combination of the following factors: (1) trust in the overall system being shaken given the collapse of previously trusted players (such as FTX), and (2) short-sellers voicing concerns (primarily on Twitter).

About Sam Houston 1811 Articles
Hello, I'm Sam Houston, and I'm proud to be a part of the team as a content writer. My journey into journalism has been quite an exciting ride, and it all began with a background in content creation. My roots as a content writer have equipped me with the essential skills needed to craft engaging narratives and convey information effectively. This background proved invaluable when I decided to make the transition into journalism. The transition allowed me to channel my storytelling abilities into producing news articles that not only inform but also captivate our readers.

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