Market News

Silvergate Capital Soars as New Big-Name Investors Buy

Crypto-heavy bank Silvergate Capital (NASDAQ:SI) hasn’t had a good run lately. The Department of Justice was targeting it thanks to links between it and FTX, and its fourth-quarter results missed on every front. Nevertheless, it soared in Tuesday afternoon trading, and it’s all thanks to some expanded investment from one Silvergate Capital investor.

Not long ago, State Street (NYSE:STT) revealed that it stepped up its ownership stake from 5.3% to 9.32%. Further, Blackrock (NYSE:BLK) also revealed that it owned 7.2% of Silvergate. Now, reports emerged just recently that Ken Griffin’s Citadel Securities also has a substantial stake in the bank. Citadel, based on recent filings, now holds a 5.5% position. It wasn’t alone, either; Susquehanna Securities also revealed a 7.5% stake in Silvergate. Even George Soros‘ fund owned shares.

Despite all these interested buyers, the company is drawing a lot of attention in other directions. It’s currently the second-most shorted stock in the market, reports note. So far, over 72.5% of Silvergate’s shares are shorted. With Silvergate also seen taking out a $3.6 billion loan from the U.S. Federal Home Loan Banks system, it’s clear that it’s under some pressure. With the Justice Department still keeping an eye on the firm, the risk of something going wrong is fairly substantial.

Overall, analyst consensus calls SI stock a Hold, with 0.34% upside potential, thanks to its average price target of $17.56 per share.


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