Silvergate Capital craters over 50.0% amid solvency concerns

Silvergate Capital (SI.US) stock fell 53.0% on Thursday after JPMorgan and Canaccord Genuity downgraded the crypto bank a day after the company delayed the filing of its annual report and warned that it’s “currently analyzing certain regulatory and other inquiries and other investigations” and its ability to continue operating for the next 12 months.

“The losses from the securities sales appear large enough to result in Silvergate calling out that it may now be less than well capitalized on its regulatory capital ratios,” JPMorgan analyst Steven Alexopoulos said in a note Thursday. “Given significant regulatory challenges (including the pending investigations from regulators) and business challenges (including the exacerbating liquidity challenges amid a crisis of confidence from digital asset customers), the company is reevaluating its businesses and strategies.”

Also its partners Coinbase and Galaxy Digital abandoned the company, emphasizing that they had minimal exposure to Silvergate, which has been under pressure since the collapse of major crypto exchange FTX in November.

Silvergate Capital (SI.US) stock is trading over 97.50% below its high from November 2021 and today reached fresh all-time low at $6.12. Source: xStation5