On Friday 10th of March 2023, the United States authirties closed down the Silicon Valley Bank (SVB) and seized all of its assets. The closure of SVB makes it the biggest retail bank to go bankrupt since 2008.
This has caused a lot of panic in the world of financial market. Billions of monies belonging to firms and investors remaining stranded. Since the news broke out, many people around the world have shown their concerns on their various social media platforms. As you would expect, Elon Musk happens to be one of those sharing their personal opinions on the matter.
The tweet of the Twitter CEO came out after Razer CEO Min-Liang Tan suggested an idea to Musk. In his tweet, Tan suggested that Twitter Purchased SVB and convert it into digital banking. This did not go unnoticed by the CEO of Twitter, Elon Musk making him reply with the tweet, “I’m open to the idea”.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
Elon Musk’s Tweet About SVB Attracted Mixed Reactions
As a platform that gives equal right of speech to all users, the reply from Musk attracted a lot of mixed reactions. One user who did not seem to be a fan of the idea replied with “And sell another $20 billion worth of $Tesla stock. No thanks!”
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Another user also decided to use the opportunity to take a swipe at Musk by saying, “Yeah, give him something to keep him busy. He barely has anything to do”. One user who seems to side with the idea also asked Musk to add the banking business to his ecosystem. “You’re just missing a bank in your ecosystem,” his comment read.
Elon Musk Wants to Purchase a Collapsed Bank, What Really Happened to SVB?
As a bank that focuses on lending money to startup business, the stock of SVB fell by 60% within a week which prompted regulators to shut it down. The genesis of SVB’s shutdown began when the bank announced that they were selling some of their stock due to lack of money. This is because they were losing customers’ deposits. This news triggered the stock market to respond immediately, thereby dropping SVB’s stock by 60%.
When this happened, the California Department of Financial Protection and Innovation ordered for the immediate closure of the bank. The regulators then chose Federal Deposit Insurance Cooperation to handle all tasks related to the closure of SVB.
It is worth noting that SVB was one of the largest banks in the country with about 17 branches across California and Massachusetts alone. The DFPI also said that by the close of business day on March 9, SVB had a negative cash balance of $958 million.