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- 1 The crypto-friendly bank needs more time to find out the extent of its damage.
- 2 Analyst lowered targeted price and rating for SI stock.
- 3 FTX’s LedgerX asked users not to use Silvergate for wire transfers.
Popular crypto bank Silvergate Bank indicating delay in its 10-k report to the SEC makes its company’s stock prices tumble. Parent company of the bank, Silvergate Capital (NYSE: SI) stock dropped more than 30% in after hours trading. Just a day before, the company went through a shock after downgrading its stock rating and target price. A known US derivative also announced termination of its partnership with the bank to facilitate wire transfers.
Silvergate’s SEC Filing Notes Delay in Annual Report
Silvergate Capital Corporation submitted “notification for late filing” to the United States of Securities and Exchange Commission on Wednesday, March 1, 2023. The financial company cited several reasons for not being able to file its annual report with the financial regulator until March 16, 2023.
The company stated that the company’s management is steadily working towards completing “all of the required information for the Form 10-K.” Though a major part of the work has been done by now, it needs more time to go through analysis, record journal entries of several events and accomplish the evaluation of financial reporting’s internal controls.
In addition, it also seeks more time to let the independent registered public accounting firm to get done with certain auditing procedures. Silvergate is also looking towards the “regulatory and other inquiries and investigations” going on related to the company. The independent accounting firm is also seeking information related to the matter of regulatory scrutiny.
In a nutshell, a crypto-friendly bank needs additional time for the assessment of the losses and extent of its financial damage that took place during the crypto winter last year.
Early impressions of the instance soon started reflecting of SI stock prices. At the time of writing, the stock price is trading at 13.53 USD after dropping 2.73% in a day. However, the after hours trading price of SI stock is 9.24 USD, after a significant drop of 31.71% within 24 hours.
Lost Stock Price Target, Rating and LedgerX Services
Earlier than the drop in actual price, Silvergate’s targeted stock price and its rating was lowered. Analyst at investment bank Keefe, Bruyette and Woods (KBF), Michael Perito shared this in a research note to clients. According to the note, the stock rating dropped from outperform to perform, while the target price decreased to 16 USD from previous 25 USD, a steep contraction of 36%.
Analyst cited lack of transparency in the outlook of the financial firm towards crypto as the reason behind the drop.
On the same day, prominent US derivative of bankruptcy crypto exchange FTX, LedgerX demoted Silvergate from their partner to facilitate the wire transfer. The company appointed New York based full service commercial bank Signature Bank for the services as it asked users to use the bank for wire transfers.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
