Higher-than-expected deposit withdrawals by customers at Silvergate Capital is ringing the alarm at JPMorgan.
Higher-than-expected deposit withdrawals by customers at Silvergate Capital are ringing the alarm at JPMorgan. Analyst Steven Alexopoulos downgraded shares of the cryptocurrency company to neutral from overweight, citing concerns as client deposits decline. Silvergate on Thursday disclosed preliminary fourth-quarter results that showed a 68% drop in total deposits as FTX erupted in scandal. The company also shared a loss of $718 million as it sold $5.2 billion of debt securities to raise cash.
"The implications to the company's business from the significant reduction in client deposits has near- as well as longer-term impacts," he added. Thursday's news pushed shares down more than 42% on the day. The stock fell another 17% before the bell on Friday. Silvergate also shared plans to reduce its workforce by 40%.
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