BuzzFeed Has Most of Its Cash in Failed Silicon Valley Bank
thewrap.comit had approximately $487 million held by Silicon Valley Bank. The company said that the number represents approximately 26% of its cash and cash equivalents, and the company will be able meet its pending financial obligations for at least “the next 12 months and beyond.”The Santa Clara-based Silicon Valley Bank was closed Friday by the California Department of Financial Protection and Innovation, marking a major ending to what had for decades been one of the pillars of financing in the tech industry economy.The bank first made headlines Wednesday after it notified investors that it needed to raise just over $2 billion to offset $1.8 billion in losses it incurred from investments in mortgage-backed securities, which were devalued thanks to the Fed’s decision to raise interest rates.The next day, dozens of SVB’s venture capital clients — urged on by a venture capital fund founded by billionaire Peter Thiel and others — started pulling their assets from the bank, which one investor previously described as “a hysteria-induced bank run.”The customers withdrew $42 billion by the end of Thursday, according to California regulatory filings, and as a result the bank was left with a negative cash balance of $958 million.
Regulators shut SVB down and seized its assets on Friday morning.The bank’s trajectory from Silicon Valley institution to the second biggest bank failure in U.S.
history took less than 48 hours.The bank and its assets are now held by the Federal Deposit Insurance Corporation; FDIC insures all bank deposits in the United States up to $250,000, and the agency said Friday that all insured customers should expect to regain access to their money by Monday..
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