NFT Evening NFT Evening
    Facebook Twitter Instagram Reddit
    NFT Evening NFT Evening
    • News
      • Collectibles
      • Crypto Art
      • Blockchain games
      • Metaverse
      • Music
      • Interviews
    • Guides
      • Top NFT Projects
      • Top Blockchain Games
      • NFT Marketplaces and Tools
    • Learn here!
      • What is an NFT?
      • How to keep your NFTs safe
      • NFT Glossary
    • NFT Calendar
      • NFT Drops
      • NFT Conferences
    NFT Evening NFT Evening
    News

    Home » News » SVB Owes $150M To Roblox & The Government Is Going To Pay

    SVB Owes $150M To Roblox & The Government Is Going To Pay

    On Monday, President Biden announced government assistance to avoid a larger meltdown of the US banking industry
    By EvanMarch 14, 2023Updated:March 15, 20233 Mins Read
    Contents hide
    What Happened with SVB?
    How does this Impact Roblox?
    Are Other Banks in Danger of Failing?

    SVB, short for Silicon Valley bank, created shockwaves in the markets last week. The bank sold its $21b bond portfolio at a loss. Depositors responded by removing assets from the bank en-masse, initiating a classic bank run as rumors of the bank’s insolvency spread over social media. Popular gaming platform, Roblox, announced they were unsuccessful in withdrawing $150m of company funds before the bank collapsed. What happened with SVB to cause its implosion?

    Customers lined up outside SVB's headquarters in Santa Clara, CA
    Lines of worried customers stretched out the door of SVB headquarters in Santa Clara amidst a bank run
    Image Credit: AFP, Noah Berger

     

    What Happened with SVB?

    SVB is a huge part of the US tech industry. The California-based lender specializes in providing banking services for tech companies of all sizes, from startups to late-stage publicly traded corporations. Before this week, the bank held $209b of funds under management. They were the 15th largest bank in the country and the 2nd largest bank in US history to fail. In fact, this is second only to Washington Mutual’s failing during the Great Financial Crisis of 2008.

    Like many other banks, SVB took in more deposits than it could lend out during the covid-19 pandemic. The bank responded by buying US Treasuries. However, after the Federal Reserve hiked interest rates to combat inflation,  the value of SVB’s US Treasuries plummeted.

    After exiting their bond investments at a loss and unsuccessfully raising capital by selling company shares, many large depositors withdrew money from the bank. Word quickly spread throughout the close-knit tech community and created a snowball effect. SVB did not have enough liquidity on hand to process the amount of withdrawal requests. So, eventually, regulators stepped in to shut the bank down.

    Since then, the Treasury Dept, FDIC, and Federal Reserve issued a joint statement promising the use of government funds to guarantee depositor funds.

    How does this Impact Roblox?

    Roblox holds $150m of capital with SVB. On Friday, Roblox announced, “Of Roblox Corporation’s $3 billion of cash and securities balance as of February 28, 2023, approximately 5% is held at Silicon Valley Bank.  Thus, regardless of the ultimate outcome and the timing, this situation will have no impact on the day to day operations of the Company.”

    Good news for the gaming giant and metaverse builder. Roblox shares are up 10% from Friday morning, clearly demonstrating the lack of concern about the company’s financial wellbeing moving forward.

    Thanks to the government intervention to protect depositor accounts, Roblox will be able to recover all $150m of its company funds held with SVB.

    Roblox is a popular gaming platform that had money with SVB
    Roblox had $150m of company funds at risk when SVB collapsed
    Image Credit: Roblox

    Are Other Banks in Danger of Failing?

    Regional bank stocks dumped heavily in Monday’s early trading session. SVB’s fallout led to 12 different banks having the trading of their stocks halted. President Biden even appeared on national television to promise government assistance to the troubled bank sector. Moreover, he pledged to do everything possible to avoid any further contagion risk.

    Bank stocks responded favorably. The stock price of First Regional Bank, for example, skyrocketed over 50% on Tuesday after shares dropped more than 75% after the SVB news broke.

    Aided in part by a favorable CPI print today, it seems like regulators managed to avoid a larger financial disaster.  Investors now look towards next week’s Federal Reserve. This could possibly signal an end of the 2022-2023 bear market.

     

     

     

    Join Our New "To The Moon" daily Newsletter

    Get our free, 5 minutes daily newsletter. Join 25,000+ NFT enthusiasts & stay on top 👊🌚

    Thank you!

    You have successfully joined our subscriber list.

    .

     


    All investment/financial opinions expressed by NFTevening.com are not recommendations.

    This article is educational material.

    As always, make your own research prior to making any kind of investment.

    metaverseRoblox
    Previous ArticleRTFKT Japan Fans Rejoice: Special Event in Tokyo Announced!
    Next Article Yuga’s TwelveFold NFT Collection Sparks Twitter Backlash
    Evan
    • Twitter

    Evan is a New Hampshire-based real estate developer interested in how Web3, specifically the metaverse, DeFi, and play-to-earn gaming, will provide new opportunities for passive income investors. He enjoys skiing, spending time with his family, and endlessly scrolling Crypto Twitter.

    More great NFT Evening content:

    Tony Barnes Launches Music Artists With Karta Metaverse Studio

    March 15, 2023

    Yuga’s TwelveFold NFT Collection Sparks Twitter Backlash

    March 14, 2023

    RTFKT Japan Fans Rejoice: Special Event in Tokyo Announced!

    March 14, 2023

    DRESSX Raises $15M To Transform Digital Fashion

    March 14, 2023

    10KTF Hoodies: Wear Your NFT Love Proudly

    March 14, 2023

    Instagram NFTs: Goodbye For Now

    March 14, 2023

    Beatport Enters Web3 With Its New Platform, Beatport.io

    March 14, 2023

    Beeple Studios Opening Held on Anniversary of ‘Everydays’ Sale

    March 13, 2023
    Latest NFT News

    Tony Barnes Launches Music Artists With Karta Metaverse Studio

    March 15, 2023

    Yuga’s TwelveFold NFT Collection Sparks Twitter Backlash

    March 14, 2023

    SVB Owes $150M To Roblox & The Government Is Going To Pay

    March 14, 2023

    RTFKT Japan Fans Rejoice: Special Event in Tokyo Announced!

    March 14, 2023

    DRESSX Raises $15M To Transform Digital Fashion

    March 14, 2023

    Zebedee & Fumb Games Celebrate 1M “Bitcoin Miner” Players

    March 14, 2023

    10KTF Hoodies: Wear Your NFT Love Proudly

    March 14, 2023

    Instagram NFTs: Goodbye For Now

    March 14, 2023
    Get The FREE Exclusive Report
    CLICK HERE

    NFTevening is the biggest website for NFT news. We cover; breaking news, upcoming mints, plus, interviews with top NFT artists and projects. Put simply, we are the best place for new and experienced non-fungible token fans — making content fun & accessible

    Privacy policy
    Terms and conditions

    Article Categories
    • Blockchain games
    • Collectibles
    • Columns
    • Crypto Art
    • Guides
    • Interviews
    • Metaverse
    • Music
    • News
    • NFT Marketplaces and Tools
    • Sponsored Content
    • Top Blockchain Games
    • Top NFT Projects
    NFT Calendar
    • Today’s NFT Drops
    • Upcoming NFT Drops
    • Solana NFT Drops
    • NFT Calendar
    • NFT Calendar : Add Your NFT Event
    Get In Touch
    • Advertise (Media Kit)
    • Collaboration and Press Releases
    • Job Opportunities
    • About Us
    • Contact Us
    NFT Beginners Guides
    • How to Sell NFT Art
    • How to Create NFT Art
    • How to Display NFT Art
    • How To Make Passive Income With NFTs
    • Best Crypto Wallet
    • Best NFT Coins
    • Best NFT Rarity Tools
    • What is a DAO ?
    • What Are Crypto Gas Fees ?

    Type above and press Enter to search. Press Esc to cancel.