Billionaire investor Peter Thiel is facing criticism for holding his own money in SVB Financial Group when it folded. At the same time, his venture capital firm, Founders Fund, advised its clients to withdraw their deposits.
Thiel told the Financial Times that he didn’t expect SVB Financial to collapse and had about $50 million with the bank when regulators stepped in to shut it down. His latest disclosure is drawing criticism for spreading panic that led to the SVB run.
Thiel’s Founders Fund wasn’t alone in advising its clients to spread their funds. Other VCs also urged startup founders to diversify away from SVB.
While VCs defended their move as a measure to safeguard the interests of their clients, it led to a large number of customers withdrawing their deposits, which ultimately led to the closure of SVB Financial.
Whether Thiel contributed to the run on SVB needs to be ascertained, but being a renowned venture capital firm, Founder Fund’s outlook on SVB contributed to the fears.
The SVB fallout and Credit Suisse (NYSE:CS)(GB:0QP5) crisis have put the entire banking sector under pressure, with regional banks taking the maximum hit. First Republic Bank (NYSE:FRC) was among the top losers. Its stock fell over 72% month-to-date.
FRC has taken steps to shore up its capital. Meanwhile, a Wall Street Journal report highlighted that consortium banks would inject billions of dollars as capital into FRC. With FRC stock losing substantial value, let’s check what analysts recommend about it.
What’s the Prediction for FRC Stock?
With eight Buy, eight Hold, and one Sell recommendations, FRC stock has a Moderate Buy consensus rating. Due to the slump in FRC stock, analysts’ average price target of $144.14 implies 320.6% upside potential.
