The sudden collapse of Silicon Valley Bank has put more than a quarter of Roku’s cash at risk. The streaming company had $487 million, representing 26 percent of its cash, in Silicon Valley Bank, the company announced Friday in an SEC filing.
The future of those funds is now uncertain as federal regulators took over the financial institution amid the second-largest bank collapse in United States history. “The company’s deposits with SVB are largely uninsured,” Roku wrote in its filing. “At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit with SVB.”
In a statement on Friday, the Federal Deposit Insurance Corporation (FDIC) said it will pay “uninsured depositors an advance dividend within one week” and that “uninsured depositors will receive a moratorium on the remaining amount of their uninsured funds.” But there’s still a lot of uncertainty about how long that process will take and how many of their uninsured fund companies will eventually be able to recover.
However, Roku’s situation, at least for now, is a lot less dire than many of the smaller startups that depended on Silicon Valley Bank, some of which are now unable to pay their bills or their employees.
In its SEC filing, the company noted that it has more than $1 billion in cash with multiple other banks. “As stated in our 8-K, we expect that Roku’s ability to operate and meet its contractual obligations will be unaffected and that we will continue to have access to $1.4 billion in cash and cash equivalents across multiple major Financial Institutions.” a Roku spokesperson said in a statement to Engadget.
While Silicon Valley Bank was previously a little-known institution, it was known for its close relationships with startup founders, who made up a large portion of its clientele. But, like from Bloomberg Matt Levine explains that the bank’s reliance on fixed income assets also uniquely exposed it to the conditions that ultimately led to a run on the bank Thursday after prominent venture capitalists urged founders to pull their money out of the institution.
Roku isn’t the only major publicly traded tech company now incurring losses from the bank’s collapse. Roblox had $3 billion, about 5 percent of its cash, with Silicon Valley Bank, the company told the SEC. “Regardless of the ultimate outcome and timing, this situation will not affect the company’s day-to-day operations,” it wrote in a document. Video service Vimeo also disclosed that it had “less than $250,000” in the bank.
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