Tesla CEO and Chief Twit Elon Musk have expressed openness to the idea of buying Silicon Valley Bank after the bank's recent collapse, but at least one Tesla investor believes Twitter should be the one to make the acquisition, as reported first by Insider on Saturday, March 11.
Min-Liang Tan, CEO of gaming computer company Razer, tweeted his suggestion that Twitter should buy SVB and become a digital bank, to which Musk responded, "I'm open to the idea." It is unclear if Musk's comment was meant to be taken seriously or if it was merely a casual remark.
Tesla CEO Elon Musk looks up as he addresses guests at the Offshore Northern Seas 2022 (ONS) meeting in Stavanger, Norway on August 29, 2022. - The meeting, held in Stavanger from August 29 to September 1, 2022, presents the latest developments in Norway and internationally related to the energy, oil and gas sector.
SVB's Collapse
The Twitter user who suggested the acquisition to Musk, Sanjay, describes himself as a "Tesla customer and investor, bull and Elon fan," but it is unknown if he is a shareholder or how large his holdings may be.
Musk made a series of stock sales from his Tesla holdings last year, totaling almost $23 billion, to help finance his Twitter acquisition, which contributed to the share price decline.
SVB was shut down on Friday by US regulators following a run on deposits by startup founders.
The bank's falling stock price, following a capital raising announcement, rattled investors, leading many to withdraw their funds. As a result, the bank is now being managed by receivers, which could delay access to deposits for an extended period.
The situation has raised concerns about the stability of the US banking system and the need for stronger regulations to prevent such incidents in the future. It also underscores the importance of having strong and diversified financial systems that can withstand market shocks and ensure the safety of depositors' funds.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
SVB's Impacts
Silicon Valley Bank's collapse will have an impact on several entertainment businesses because many of them already had accounts there. This includes streaming company Roku which had around $500 million of its cash in jeopardy.
Roku revealed that it has $487 million in uninsured deposits at the Silicon Valley Bank during a filing with the Securities and Exchange Commission.
"The Company's deposits with SVB are largely uninsured. At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB," Roku said in its filing.
Musk's interest in acquiring SVB has generated mixed reactions from investors and raised concerns about the stability of the US banking system. Whether the tech CEO will follow through on his interest in acquiring SVB or if he was simply exploring the idea remains to be seen.
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