So... the summary is that for all the fear some people had that taxpayers would "bail out billionaires," and the corresponding fear that companies had that "a ton of our money could evaporate and destroy the economy with massive downstream impact"... FDIC/Treasury stepped in and did the right thing: depositors made whole, no taxpayer funds, bank assessment to make up any difference, & SVB equity/unsecured debtholders (mostly) wiped out.
A very good result.
@mmasnick i'm reading the press release + see no mention of how exactly the FDIC is resolving this.
have you seen that detailed anywhere?
where's the money coming from that is making depositors whole above the insured limit of $250k tomorrow?
so the securities that becker was trying to sell (did sell some?) are gonna be used to restore deposit values.
that makes sense, but what a clown show those VCs triggered with their letters.
@jbminn @mmasnick My naive recollection/understanding is they were selling $2.25b in assets Thursday and raising $500m via stock. Call that $3b.
Given $42b were attempted to be pulled out on Friday and leaving them with a cash balance of - $986m then an asset sale quickly and/or a small Fed loan would get them cash positive.
But won't they need to basically block the entire $40b going out (or $42 - $986m - $2bb I guess = $40b)?
(all numbers from memory, likely off quite a bit)
Mike Masnick ✅
John Minnihan
Bricin