On Friday, the unthinkable happened: Silicon Valley Bank crumbled in a mere 48 hours, prompting federal regulators to take it over. The institution, which was launched in 1983, was a go-to for tech start-ups, and numerous companies now have money being held in limbo, maybe never to return. One of those companies, who have a horrifying amount of money tied up there, is perhaps the most popular gizmo for streamers.
As per CNN, Roku had approximately $487 million of its $1.9 billion stored in the now-shuttered bank. That’s about 26% of its cash.
“The company’s deposits with SVB are largely uninsured,” Roku said in a grim statement. “At this time, the company does not know to what extent the company will be able to recover its cash on deposit at SVB.”
That doesn’t mean Roku will suddenly stop working on the nation’s TV sets. They said they have enough cash flow to “meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.”
Roku isn’t the only company with SVB money may no longer exist. Roblox, the video game company, had a comparatively low 3% of its $3 billion income tied up there, while the aerospace manufacturer Rocket Lab had 8% invested in SVB. Meanwhile, crypto lender BlockFi held $227 million, all of it uninsured, there as well. It’s another sign not to listen to Jim Cramer for financial advice.
(Via CNN)