updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131hustle domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131wpforms-lite domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131Crypto-friendly bank Silvergate has announced plans to shut down in an orderly manner and fully repay all deposits.
Silvergate Capital has decided to shut down operations and liquidate its bank following effects of problematic market conditions. On Wednesday, the crypto-focused bank made the grim announcement, which also saw its stock plummet over 36% in after-hours trading.
In addition to ‘voluntarily liquidating’ in an ‘orderly manner,’ Silvergate also revealed that it would fully repay all deposits.
The announcement read:
“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward. The Bank’s wind down and liquidation plan includes full repayment of all deposits. The company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.”
Silvergate also added it would “discontinue the Silvergate Exchange Network (SEN),” previously announced last week on its public website. However, the bank assured that all “other deposit-related services remain operational” amid the wind-down process. In addition, Silvergate committed to notifying customers of any further changes to the development.
Silvergate revealed Centerview Partners LLC as its financial advisor in its liquidation proceedings. In addition, the California-based crypto bank also disclosed that Cravath, Swaine & Moore would act as legal advisors.
Silvergate’s plan to shut down comes on the heels of discontinuing its SEN payments platform, considered one of its core offerings. Last week, the crypto-friendly financial institution also stated it would delay filing its annual 10-K for last year. The reason given was to sort out the business’ viability. However, Silvergate also revealed the delayed filing was due in part to a looming regulatory crackdown. This includes an investigation already afoot by the US Department of Justice.
Silvergate also ascribed the filing delay to Congressional inquiries, including investigations from its banking regulators. These regulators include the Federal Reserve as well as the California Department of Financial Protection and Innovation.
When Silvergate warned of impending insolvency, some crypto businesses, including Coinbase (NASDAQ: COIN) and Galaxy Digital, proceeded to sever ties with the embattled bank.
Silvergate, one of the two primary banks for crypto companies, has been struggling for months. For instance, the company laid off 40% of its workforce in January and reported a massive $1 billion net loss for Q4 2022. The loss resulted from the customer exodus Silvergate experienced at the end of last year, which drove deposits down 68% to $3.8 billion. The crypto-centric bank sold $5.2 billion in debt securities to cover these withdrawals.
In addition to its emergency liquidity injection and substantial staff downsizing, Silvergate also suspended plans to launch a digital currency. Furthermore, the bank wrote off the $196 million linked to its purchase of Diem Association from Meta (NASDAQ: META).
Silvergate currently has a little over $11 billion in assets, compared to the more than $114 billion worth of assets at Signature, another leading crypto-friendly bank.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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EV makers Lucid, Nikola, and Lordstown saw their stock decline mostly owing to disappointing failures regarding their production figures.
Three electric vehicle (EV) startups that went public via special purpose acquisition companies (SPAC) recently fell short of their projected 2022 goals. According to reports, EV companies Lucid Group Inc (NASDAQ: LCID), Nikola Corp (NASDAQ: NKLA), and Lordstown Motors (NASDAQ: RIDE) all had a disappointing 2022.
The trio missed their EV goals by significant margins, with Lucid and Lordstown Motors suffering considerable deficits in production objectives. In perspective, Lucid accomplished just over a third of its production agenda for the year at 7,180 Air sedans. The California-based EV maker had been gunning to produce 20,000 vehicles in 2022. Meanwhile, Lordstown Motors could only manage the production of 31 Endurance pickups in the same period. This number pales compared to the 500-vehicle output that the Ohio-based EV automaker had in mind.
Nikola also delivered an underwhelming number of 131 Tre heavy-duty trucks. This number was roughly a quarter of the 500 vehicles the Phoenix-based company had envisaged for its 2022 production line.
Following their less-than-stellar 2022 EV production outing, Lucid, Nikola, and Lordstown see the odds improving little in 2023.
Lucid’s shares nosedived following the company’s restrained production forecast of 14,000 vehicles this year. The EV maker’s shares slumped by more than 14% in Thursday’s early trading session after Lucid hinted at waning demand. According to Visible Alpha, analysts had expected production of just under 22,000 vehicles by Lucid this year.
In addition, the electric vehicle manufacturer also acknowledged it was locked in a price war with electric vehicle heavyweights Tesla (NASDAQ: TSLA). Tesla and Ford Motor Company (NYSE: F) have embarked on aggressive price cuts to induce higher demand amid a faltering tech sector. However, these cuts also make it harder for less illustrious rivals like Lucid and Rivian Automotive Inc (NASDAQ: RIVN) to eke market share.
BofA Global Research downgraded Lucid stock from a “buy” to “neutral.” The research firm also added that considering operations and free cash flow, the company might not break even until 2027.
EMG Advisors chief executive officer Will McDonough also commented on the plight of Lucid’s earnings, saying:
“Lucid’s earnings sadly show that it’s a business that’s in the public markets earlier than it should be. Now that the markets are less fluid, investors are focused on the fact that this company only produced 7,000 cars in 2022.”
Nikola’s stock also declined after the EV company announced projected deliveries of no more than 375 trucks. Meanwhile, Lordstown Motors’ shares also slipped after the EV maker announced the suspension of production and customer deliveries in January. According to Lordstown Motors, it paused output and customer deliveries because of performance and quality issues.
Lordstown slumped 15%, while Nikola stock declined 9% in yesterday’s New York trading session. Nikola’s shares initially dropped 1.3% following a quarterly earnings miss.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.