The bulk of Buzzfeed’s cash and cash equivalents for 2022, totaling $56 million, was held by bankrupt Silicon Valley Bank, the Northern California financial powerhouse that went bankrupt last week.
However, in a joint statement released by the US Department of the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation, the US government reassured that all depositors will be fully protected.
“The company is accessing its funds and currently does not expect any disruption to its ongoing operations,” BuzzFeed wrote as part of its fourth quarter and full year 2022 financial results on Monday.
“This Silicon Valley Bank situation certainly impacted our weekend, but I don’t think it will have a big impact on our business,” Buzzfeed CEO Jonah Peretti said on the call. to the company’s results on Monday.
Announcement follows Roku disclosure he had about $487 million held by Silicon Valley Bank. The company said that number represents about 26% of its cash and cash equivalents, and the company will be able to meet its pending financial obligations for at least “the next 12 months and beyond.”
Santa Clara-based Silicon Valley Bank was shut down by the California Department of Financial Protection and Innovation on Friday, marking a major end to what had for decades been a mainstay of financing the technology industry economy.
The bank made headlines on Wednesday after telling investors it needed to raise just over $2 billion to make up for the $1.8 billion losses it suffered on investments in backed securities. to mortgages, which were devalued thanks to the Fed’s decision to raise interest rates.
The following day, dozens of SVB’s venture capital clients – spurred by a venture capital fund founded by billionaire Peter Thiel and others – began withdrawing their assets from the bank, something an investor previously said described as “a bank run caused by hysteria”.
Customers withdrew $42 billion by the end of the day Thursday, according to California regulatory filings, leaving the bank with a negative cash balance of $958 million. Regulators shut down SVB and seized its assets on Friday morning.
The bank’s trajectory from the Silicon Valley institution to the second-largest bank failure in US history took less than 48 hours.
The bank and its assets are now owned by the Federal Deposit Insurance Corporation; The FDIC insures all U.S. bank deposits up to $250,000, and the agency said Friday that all insured customers should expect to regain access to their money by Monday.
