Silvergate Capital downgraded to Neutral from Overweight at JPMorgan

JPMorgan analyst Steven Alexopoulos downgraded Silvergate Capital to Neutral from Overweight with a price target of $14, down from $30. The company’s preliminary Q4 results were "far worse" than expected, Alexopoulos tells investors in a research note. While the challenging backdrop for the crypto settlement business was a factor in the worse than expected results, concerns voiced by short-sellers likely also contributed to Silvergate’s customers withdrawing deposits from the platform at a greater than anticipated level, says the analyst. He believes the implications to the company’s business from the significant reduction in client deposits has near- as well as longer-term impacts. Alexopoulos sees upside potential being fairly limited until Silvergate’s earnings power is better understood.