The biggest bank failure since the financial crisis 15 years ago has hit streaming giant Roku. In an SEC filing, the company disclosed that 26% of its cash was held at Silicon Valley Bank, and the funds were “largely uninsured.” The 16th largest bank in the U.S., with more than $200 billion in assets, SVB collapsed Friday and was taken over by the Federal Deposit Insurance Corp.
Roku’s filing says the FDIC has told those with insured funds at the bank that they will have full access to their insured deposits no later than Monday morning.
Uninsured depositors, meanwhile, will receive an “advance dividend” over the next week. “Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds,” according to the filing. “As the FDIC sells the assets of SVB, future dividend payments may be made to uninsured depositors.” As of Friday, about $487 million of Roku’s total cash and cash equivalents of $1.9 billion was held by SVB, Roku said.
About $1.4 billion of the company’s cash is spread across multiple large financial institutions. “At this time, the company does not know to what extent the company will be able to recover its cash on deposit at SVB,” the filing said. “Notwithstanding the closure of SVB, the company continues to believe that its existing cash and cash equivalents balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.” The FDIC was created as an insurance safety net for investors after the stock market crash of 1929 and the subsequent run on banks that plunged the country into the Great Depression.
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