Billionaire investor Bill Ackman calls on the US government to consider a bailout of Silicon Valley Bank if private investors won't step up
Billionaire investor Bill Ackman says the US government should consider a"highly dilutive" bailout of Silicon Valley Bank amid jitters about its financial position.
The bank's failure"could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash," Ackman said in a series of tweets on Thursday."If private capital can't provide a solution, a highly dilutive gov't preferred bailout should be considered," he said.
He further said that"the risk of failure and deposit losses here is that the next, least well-capitalized bank faces a run and fails and the dominoes continue to fall. That is why gov't intervention should be considered." On Thursday, the SVB Financial Group-owned bank's share price tanked by over 60% to $106.04 after itdue to a $21 billion firesale of its bond portfolio. To cover losses, SVB wants to raise $2.25 billion by selling stock and issuing related securities.
The bank's in damage-control mode now. Greg Becker, the CEO of Silicon Valley Bank, told clients to"stay calm" at a conference call on Thursday,