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Odaily Translator | Nian Yin Si Tang
, original author: Matt Turner
Odaily Translator | Nian Yin Si Tang
A fund run by Cathie Wood sold nearly all of its holdings in Silvergate Capital Corp. after the cryptocurrency-focused bank announced that it would lose money as customers withdrew most of their deposits in the fourth quarter of 2022. Forced to sell assets at huge losses.Her ARK Fintech Innovation exchange-traded fund sold about 404,000 Silvergate shares on Thursday, cutting the ETF’s holdings by more than 99%, according to data compiled by Bloomberg. The fund's remaining holdings are less than 4,000 shares, worth about $43,000, or about 0.01% of the fund's total portfolio.Silvergate Thursday
tell investors
Customer deposits in digital assets plummeted from $11.9 billion to $3.8 billion in the fourth quarter, when the fallout from the FTX debacle shook investor confidence in the cryptocurrency lender. The outflows forced the bank to sell securities and related derivatives at a loss of as much as $718 million, far exceeding the bank's total profits since at least 2013.
In addition, the bank has already laid off 40% of its workforce, or about 200 employees, and said it would cut operations. The company shelved plans to launch its own digital currency, writing off its $196 million purchase of technology built by Facebook in a failed attempt to launch a cryptocurrency-based payments network. However, Silvergate said it remains committed to the crypto industry and has the funds to deal with “continuing periods of transition.”
The news sent Silvergate shares down a record 43% on Thursday and another 6.9% on Friday. The company’s shares have been on a downward spiral for more than a year as the bear market in the cryptocurrency industry continues. Since hitting an all-time closing high of $222.13 in November 2021, the stock has fallen more than 94%, wiping about $5.5 billion off its market value.
Wood's decision to exit her position almost entirely was a swift reversal from just two months ago. Concerns about the financial health of crypto companies deepened as the collapse of Sam Bankman-Fried's cryptocurrency exchange FTX, when her ARK Fintech Innovation Fund bought more than 200,000 Silvergate shares in a week . She sold about 190,000 Silvergate shares in mid-December, when the company’s stock was trading at about $19 a share, about 50% above Thursday’s closing price.
Wood was not alone in his disappointment at Silvergate after the announcement in a preliminary release of quarterly results on Thursday. At least eight analysts cut their price targets on the stock, including Canaccord Genuity's Joseph Vafi, who lowered his price target on Silvergate shares to $25 from $150. The downgrade brings the crypto bank's average 12-month price target to $19.45, but it's still about 55% above Thursday's close.
