• Silvergate Capital Corp (NYSE: SI) stock dropped nearly 50% on Thursday after it delayed the submission of its annual 10-K report.
• JPMorgan analyst Steven Alexopoulos downgraded the financial services company to „underweight“ citing liquidity challenges.
• Coinbase also announced that it had stopped payments to or from the crypto bank today.
Silvergate Stock Crashed 50% On Thursday
Silvergate Capital Corp (NYSE: SI) saw its stock fall nearly 50% on Thursday after delaying the submission of its annual 10-K report. The company is now evaluating its ability to continue as a going concern and reevaluating its businesses and strategies due to current business and regulatory challenges.
JPMorgan Downgrades Silvergate Stock
JPMorgan analyst Steven Alexopoulos downgraded Silvergate’s stock to „underweight“ due to liquidity challenges, with short-sellers contributing to a bank run of sorts with Silvergate reporting greater than expected deposit outflows in Q4. Canaccord Genuity also downgraded Silvergate’s stock and trimmed their price target o $9.0 per share.
FTX Fiasco Hurts Silvergate
The company has been facing an existential crisis following the FTX fiasco in early November, which led them having to offload more assets than expected over the past two months, weighing on their capital ratio. This has resulted in a 65% drop compared to its year-to-date high.
Coinbase Stops Payments To/From Crypto Bank
Adding further pressure, Coinbase announced today that it had stopped payments both from and to Silvergate Capital Corp’s crypto bank as part of their evaluation of risk management techniques for digital currency transactions.
Conclusion
SilverGate Capital Corp has faced numerous headwinds recently resulting in a drastic drop in share prices for investors, with multiple analysts downgrading their outlook for the company amid liquidity concerns and risk management issues from major players like Coinbase adding additional pressure on the firm’s future prospects.