Shares in Silicon Valley Bank, a major lender to the tech industry, were halted Friday morning after a sharp sell-off in premarket trading following news of financial troubles at the bank.
The Nasdaq suspended trades on the stock a day after SVB lost more than 60 percent following the disclosure that it had lost $1.8 billion in securities sales in an effort to raise funds, as it contends with declining customer deposits.
SVB’s travails have raised fears that a broader swathe of banks may be forced into similar transactions amid rising anxiety as central banks hike interest rates.
The episode highlights that SVB clients have been forced to raise funds due to the slowdown in the tech sector.
CNBC reported Friday that SVB was in talks to sell itself after attempts to raise capital failed.
Prior to the suspension Friday morning, shares of SVB were down sharply in pre-market trading, falling again by more than 60 percent.
“The debate today is whether SVB issues are SVB’s issues or the start of a bigger issue for the banking sector,” said a note from Patrick O’Hare of Briefing.com.
Treasury bond yields continued to retreat early Friday, suggesting a “flight to safety” among investors, a dynamic “that made it look as if some parties at least thought SVB’s issues could be a bigger issue,” O’Hare said.
