According to new reports, Cathie Wood sold 99% of its Silvergate stake after the cryptocurrency-focused bank announced recently that it had been forced to sell assets at a steep loss. This is because its customers pulled out most of their deposits from the platform during the fourth quarter.
A report published by Bloomberg showed that Cathie Wood’s ARK Fintech Innovation exchange-traded fund sold virtually 404,000 shares of Silvergate last Thursday, cutting their ETF’s holding by more than 99%. The fund’s remaining holdings are less than 4000 shares, and are now just 43,000 dollars.
Silvergate bank’s customer deposits fell by more than 60%
Last Thursday, Silvergate, a cryptocurrency-focused bank, told its investors that their customer deposits fell by more than 60%, i.e. from 11.9 billion USD to 3.8 billion USD, during the fourth quarter of 2022. It was during the fallout of the fraud crypto exchange FTX collapse that rattled investors’ faith in crypto lenders. The exodus forced them to sell its securities and related derivatives at a loss of 718 million USD.
The revelation sent Silvergate’s share price down by a record 43% Thursday, and they slipped as much as 6.9% more on Friday. Also, their stock price has been in a downward spiral for more than a year amid the deepening crypto industry out. Since it recorded a closing high of 221.13 USD in November 2021, the stock has now fallen by 94%, erasing more than 5 billion dollars in market value.
Cathie Wood sold 99% of its Silvergate stake!
Cathie Wood sold 99% of its Silvergate Stake, a swift reversal from two months ago when her ARK Fintech Innovation fund purchased more than 200,000 shares of the bank in a week as the FTX collapse deepened concerns about the finances of the crypto companies. She sold about 190,000 shares of Silvergate in mid-December when it was trading at around 19 USD per share, roughly 50% higher than the closing price of last Thursday.
JPMorgan Chase & Co’s Steven Alexopoulos was one of the three analysts that Bloomberg tracked down to downgrade their recommendation on the stock, cutting his ratio to neutral from overweight. He also cut his price target by more than 40% to $14 from $30. Also, Craig- Hallum’s George Sutton downgraded the stock to hold from buy, while Bank of America Corp analyst Mr Berman cut Silvergate to underperform from neutral.
What are your thoughts on the current condition of Silvergate stock? Would Cathie Wood benefit from selling almost all Silvergate stock holdings? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.
Also Read: DCG is shutting down its wealth management subsidiary due to crypto winter.
