On Friday, March 10, 2023, US authorities closed Silicon Valley Bank (SVB) and seized all of its assets. The closure of SVB makes it the biggest retail bank to fail since 2008.
This caused a panic in the world of financial markets. Billions of money held by companies and investors remain locked up. Since the news broke, many people around the world have expressed their concerns on their various social networks. As you might expect, Elon Musk is among those who share their personal opinion on the matter.
The Twitter CEO’s tweet came after Razer CEO Min-Liang Tan pitched the idea to Musk. In his tweet, Tan suggested that Twitter bought SVB and is turning it into a digital bank. This did not go unnoticed by Twitter CEO Elon Musk, who tweeted, “I’m open to the idea.”
I am open to ideas
— Elon Musk (@elonmusk) March 11, 2023
Elon Musk’s tweet about SVB sparked controversy
As a platform that gives equal rights to all users, Musk’s response has received mixed reactions. One user who didn’t seem to be a fan of the idea responded, “And sell another $20 billion worth of Tesla shares. No thanks! »
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Another user also took the opportunity to slap Musk, saying, “Yes, give him something to keep him busy. There’s almost nothing for him to do.” The user, who seems to agree with the idea, also asked Musk to add the banking business to his ecosystem. “There is simply not enough bank in your ecosystem,” he said in a comment.
Elon Musk wants to buy a failed bank, what really happened to SVB?
As a bank that lends to startups, SVB’s shares fell 60% in a week, prompting regulators to shut it down. The genesis of SVB’s closure began when the bank announced that it was selling some of its shares due to a lack of cash. This is because they were losing customer deposits. The news caused an immediate reaction in the stock market, causing SVB shares to fall 60%.
When this happened, the California Department of Financial Protection and Innovation ordered the bank to close immediately. The regulators then chose the Federal Deposit Insurance Co-op to handle all the challenges of closing the SVB.
It should be noted that SVB was one of the largest banks in the country, with about 17 branches in California and Massachusetts alone. The DFPI also reported that SVB had a negative cash balance of $958 million as of the close of business on March 9th.