There are gaps, and then there’s this Grand Canyon of gaps:
Silvergate Capital Corporation ($SI) opened the day yesterday with a gap down of -43% ($13.53 to $7.69) and closed nearly -58% from Wednesday’s close ($13.53 to $5.72). Ouch. 🤕
Silvergate has major exposure to FTX, and investors are worried about how bad it could affect the bank. Those fears were compounded on Wednesday when it delayed its annual report and announced the sale of assets.
Then it got worse. In Silvergate’s filing, they stated concerns about their ability to continue.
Then, yesterday, $COIN sent out these Tweets:
At Coinbase all client funds continue to be safe, accessible & available.
In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.
— Coinbase (@coinbase) March 2, 2023
Coinbase has de minimis corporate exposure to Silvergate.
— Coinbase (@coinbase) March 2, 2023
When Coinbase drops you, and you make statements in a filing that you’re worried you’ll be dead soon… FUD doesn’t come close to describing how investors probably feel.
But there is definitely some bottom buying going on. Silvergate rose by +2% today before diving into new all-time lows at $4.85.
At the time of writing, Silvergate is trading higher by almost +7% at the $6 level. We’ll update you if anything major happens. 🧠