Key takeaways:
- Silicon Valley Bank collapsed and was taken over by the Federal Deposit Insurance Corporation, leaving many companies in financial limbo.
- Roku disclosed that it held approximately $487 million of its $1.9 billion in cash at Silicon Valley Bank, most of which is uninsured.
- Anyone with more than $250,000 in deposits at SVB is in financial limbo and uncertain whether they will be able to retrieve all their funds.
Silicon Valley Bank, a major financial institution in the tech and life sciences industries, collapsed on Friday and was taken over by the Federal Deposit Insurance Corporation. This has left many companies, including streaming technology company Roku, in financial limbo.
Roku disclosed in an SEC filing that it held approximately $487 million of its $1.9 billion in cash at Silicon Valley Bank, which is approximately 26% of the company’s cash and cash equivalents. The company also said that most of its deposits with the bank are uninsured.
Roblox, another company affected by the collapse, said it has $150 million with SVB. SVB claimed to have approximately half of all U.S. venture-backed tech and life science companies and more than 2,500 venture capital funds as its customers.
Roku said it has enough existing cash and cash flow from operations to “meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months.” However, the company does not know to what extent it will be able to recover its cash on deposit at SVB.
Anyone with more than $250,000 in deposits at SVB, totaling 90% of SVB’s deposits, is in financial limbo and uncertain whether they will be able to retrieve all their funds. It remains to be seen how this situation will be resolved and what the implications will be for the companies affected.
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