The Silicon Valley Bank share stopped after a sharp fall

Trading in Silicon Valley Bank shares was suspended Friday as the US lender waived a $2.25 billion capital raise intended to cover recent losses in its bond portfolio.

SVB shares were discontinued before the official opening of trading on the New York Nasdaq exchange. The California-based SVB had hoped to value $2.25 billion in stock and convertible bond sales before the market opened, but has now paused the effort, according to those in the know.

The company is investigating a possible sale, one of the people said.

SVB did not immediately respond to a request for comment.

New capital from the stock sale would have helped bridge the approximately $1.8 billion in losses incurred by SVB from the sale of approximately $21 billion in securities initiated to cover clients taking deposits from the bank.

It planned to sell $1.25 billion of its common stock to investors and an additional $500 million in mandatory convertible preferred stock, which is slightly less dilutive to existing shareholders.

The banking group’s troubles stem from a decision made at the height of the tech boom to park $91 billion of its deposits in long-term securities such as mortgage bonds and U.S. Treasuries, which were considered safe but are now worth $15 billion less than they were then SVB bought them after the Federal Reserve aggressively raised interest rates.

On Thursday, SVB shares registered their biggest drop ever, wiping $9.6 billion from the banking group’s market cap. SVB shares had been indicated to open more than 60 percent in pre-market trading before the stop was announced.

Additional reporting by Brooke Masters in New York






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