Professional investors can review published thought leadership and market updates from the Argonaut Investment Team.

2 posts found for March 2023

‘Dangerously Safe’

Less than seven weeks ago, amid a general mood of optimism that the worst was over for the technology industry, with expectations that the Federal Reserve was nearly done raising rates, Silicon Valley Bank shares rose 17% as it reported its full-year 2022 results. One bulge bracket bank announced that the company was “on the mend”; another suggested its clients start “aggressively accumulating SIVB shares.”

‘Silicon Rupture’

Argonaut has been short Silicon Valley Bank (SVIB) for the last six months, with an average entry price of $260. On Wednesday evening, the bank announced a $2.5bn equity raise and a $21bn sale of held-to-maturity Treasury and Agency securities (which realized a $1.8bn loss). Subsequently, its share price fell 60%. Today, it has been reported that the capital raising has failed, and the bank is working on a sale, which in our view will not recover any value for its equity investors. After falling another 40% pre-market, the stock has been suspended from trading.