SI Stock Alert: Why did Silvergate Capital rise 75% today?
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Many bank stocks are falling today, but an unexpected name is soaring. Silvergate Capital (NYSE:WHETHER), a former major bank in the crypto sector, announced two weeks ago that it would cease operations. This news sent SI stock into a tailspin that has continued until today.
Shares have risen steadily since markets opened today on rumors of a new deal. According BenzingaPro, a crypto exchange may consider purchasing Silvergate’s trade processing technology. As this rumor gains ground on social networks, Silvergate has not issued a statement on this. Moreover, no one seems to know who the mysterious buyer would be.
What does this mean for the bank that many investors had delisted? Let’s take a look at what we know so far.
What’s going on with SI Stock?
As of this writing, the SI stock is up 76% for the day. It had previously lost ground, falling back below $2 per share, but has since regained its full momentum and looks set to continue rising even further. For a company that has lost more than 97% of its value in the last six months, this kind of surge is remarkable. However, it is unlikely to be durable.
Unlike some of its peers, Silvergate Capital’s troubles didn’t start with the March 10 run on SVB Financial (NASDAQ:SIVB) main branch, Bank of Silicon Valley. SI stock started the month dipping deep into the red when the company issued a warning that it would miss an important filing deadline. This sent the stock on a run to the bottom until today.
At this time, very little is known about the potential deal that is driving SI stock higher today. BenzingaPro did not provide any details regarding the crypto exchange seeking to acquire Silvergate’s technology. Until one of the companies provides an official statement on the deal, it will be difficult for investors to be overconfident about the failed bank’s sudden winning streak.
At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
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