• Silvergate stock (NYSE: SI) crashed over 50% on Thursday after the company delayed filing its annual 10-K report.
• JPMorgan downgraded Silvergate stock to underweight, citing liquidity challenges and a bank-run of sorts due to short-sellers.
• Coinbase stopped payments to or from Silvergate, and Canaccord Genuity also downgraded the financial services company with a new price target of $9.00 per share.
Silvergate Stock Crash
Silvergate Capital Corp (NYSE: SI) was cut nearly in half this morning after it delayed the submission of its annual 10-K report. The crypto bank is facing an existential crisis following the FTX fiasco in early November, which has led them to reevaluate their businesses and strategies in light of current business and regulatory challenges. As a result, Silvergate Capital is now down 65% versus its year-to-date high.
Downgrades by JPMorgan & Canaccord Genuity
JPMorgan analyst Steven Alexopoulos downgraded the financial services company to „underweight“ citing continued liquidity challenges as short sellers have caused a bank run of sorts, leading to much greater deposit outflows than anticipated in Q4, which could weigh on its capital ratio. Canaccord Genuity also downgraded Silvergate stock on Thursday and trimmed their price target o $9.0 a share.
Coinbase Stops Payments
Coinbase also announced today that it had stopped payments to or from the crypto bank due to the ongoing situation at Silvergate Capital Corp.
Q4 Losses
In its latest reported quarter, Silvergate Capital had $1 billion in losses due to offloading more assets than expected over the past two months as well as decreased deposits into the account from customers wary about investing with them due to recent events.
Conclusion
Silvergate Capital Corp’s stock has been cut almost in half since yesterday and continues to be under pressure despite multiple downgrades by analysts and other major companies like Coinbase cutting ties with them until further notice. Investors should exercise caution when considering investing with this company until more information is revealed about their future plans and strategy for dealing with current issues they are facing with regards to liquidity challenges