Saturday, March 11, 2023

Jim Cramer Eating Crow for Touting Silicon Valley Bank Before Feds Seized It On Friday


Jim Cramer must think he walks on water and in the highest levels of analysists he belongs
Touting the financial darling of Venture Capitalists and Silicon Valley a touting he got really wrong
Extoling the virtues of buying shares of Silicon Valley Bank
Yet as we discovered today the bank collapsed and went into the tank
The bank’s formula was simple extend credit to companies backed by venture capital funds in the early rounds
Betting they had picked a winner and their egos would not let the companies  go down
Take warrants to bet on the upside
Knowing a few more rounds of VC money to continue the ride
With Big Tech being hammered in the stock markets that model ceased to work
Depositors fearing for their invested funds over 250 grand racing to withdraw went berserk
Start-ups seeking funding with the bank gone may be staring into a huge hole
Hard to find financing when your assets are mostly business plans and dreams on how to reach one’s goals
The 16th largest bank failure and the largest failure since Great Western cast its pall
Hopefully the Feds can find a buyer to prevent the high tech emerging sector from going into a stall
And news coming out that executives of SVB were selling shares like rat leaving a sinking ship
Will certainly aid the likes of Elizabeth Warren who wants banks to be under a more restrictive federal grip

© 3/10/2023 Michael P. Ridley aka The Alaskanpoet


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