These companies held money in a Silicon Valley bank and are not sure if they will return the funds.
Ramishah Marouf, CNN
Roku stored about $487 million of its $1.9 billion in cash at Silicon Valley Bank, which collapsed on Friday and was taken over by the Federal Deposit Insurance Corporation, the streaming technology company disclosed in the SEC filing.
That’s about 26% of the company’s cash and cash equivalents, Roku said, adding that most of his bank deposits are uninsured.
“The company’s deposits in SVB are largely uninsured,” Rocu said. “The company does not currently know to what extent it will be able to recover its cash on deposit with SVB.”
However, Roku stated that it has sufficient cash and cash flow from operations to “cover its working capital, capital expenditure and material cash requirements for known contractual obligations over the next twelve months and beyond.”
The SVB collapsed on Friday morning after a staggering 48 hours during which a banking and capital crisis led to the second-biggest financial institution failure in US history.
California regulators shut down the technology lender and placed it under the control of the FDIC.
The FDIC acts as a receiver, which usually means that it will liquidate the bank’s assets in order to pay off its customers, including depositors and creditors.
Depositors should have access to their insured deposits by Monday morning, the FDIC said. But the FDIC’s insurance limit is $250,000—many contributors had millions of cash stored in the SVB. Companies may have received money during the bank run.
The FDIC said it will pay an upfront dividend to uninsured depositors within the next week and they will receive a management certificate for the rest of their uninsured funds.
“Because the FDIC is selling the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors,” the FDIC said in a statement.
Other companies face the consequences
The Roblox statement also says that 5% of its $3 billion in cash is held in SVB. The video game company said the collapse would not affect its day-to-day operations.
Toronto-based AcuityAds Holding had $55M in SVB and only $4.8M elsewhere. This means that more than 90% of the company’s deposits were in SVB.
The company said in a statement that it has requested a halt to trading and the remaining cash “will be used to support ongoing operations.”
Cryptocurrency lender BlockFi, which filed for bankruptcy in November, said it had $227 million in SVB in a bankruptcy filing on Friday. In November, BlockFi said it stopped withdrawing funds after it faced “significant exposure” to Sam Bankman-Freed’s FTX exchange, as well as its subsidiary hedge fund Alameda.
The BlockFi money in SVB is not FDIC insured because it was in a money market mutual fund, the company learned from its bankruptcy trustee earlier this week.
And aerospace maker Rocket Lab held nearly 8%, or about $38 million, of the total cash in the failed bank, according to a statement released Friday.
The-CNN-Wire
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