(NewsReady.com) – On Friday, March 10, Silicon Valley Bank (SVB) became the largest financial institution to fail since the 2008 financial crisis. Two days later, regulators shut down Signature Bank in an effort to avoid a larger crash. Now, Elon Musk has made a surprising claim.
Silicon Valley Bank was once flush with cash. The financial institution serviced more than 2,500 venture capitalist forms, as well as many technology and life-science companies. According to The New York Times, the bank collapsed because it had invested too much of its cash into long-term debts like Treasury bonds. As the Federal Reserve started raising interest rates, those bonds weren’t as attractive any longer.
Additionally, the bank was heavily invested in the tech industry. Trouble began brewing in the industry, and banking clients were withdrawing their money rapidly, most of which was tied up in long-term debt. The bank had to sell those debts at a steep discount in order to cover the withdrawals and began to suffer as a result. The Federal Deposit Insurance Corporation (FDIC) had to step in and take control. Silicon Valley tried to find a buyer before the feds had to step in, but were unsuccessful.
When news broke about the bank’s troubles, Musk tweeted that he would be “open” to Twitter purchasing SVB.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
The Twitter owner didn’t make any other remarks about the possibility of purchasing the institution. Though there were many positive comments under the thread, one man, who claimed to be a Tesla investor, was not happy. Someone going by the Twitter name of Sanjay responded, “And sell another $20 billion worth of $Tesla stock. No thanks!”
Musk has been under fire from Tesla investors for months because he sold off millions of dollars worth of shares of the company’s stock in order to purchase Twitter. That tanked the value of the car manufacturer. In 2022, Tesla reportedly lost 65% of its value.
As of now, it doesn’t like any sale between Musk and Silicon Valley Bank is going to happen any time soon.
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