SVB Shutters and Banks Drag CE 100 Index 6.7% Lower

The CE 100 Stock Index lost 6.7% as Silicon Valley Bank collapsed during a dramatic week that raises questions about FinTechs and startup funding.

It remains unclear what the ripple effects will be from SVB’s failure — and how widespread they will be.

All pillars tracked by PYMNTS fell, led by the banking segment, which slid 10.6% last week.

Within that group, LendingClub lost 18.7% through the week. As detailed here, the company said in an SEC filing that it has about $21 million in deposits at Silicon Valley Bank and noted that the recovery of the funds “will be subject to the FDIC process.”

Fears of Contagion

While the company also noted that the deposits are “not material” to the company’s liquidity position or capital levels (LendingClub lists $8 billion in assets), the SEC filing trains a spotlight on how many unknows there are out there right now in tech banking — and when (or perhaps even whether) SVB clients will be made whole.

We reported heading into the weekend that SVB has roughly $175 billion in deposits, 6% is held in private banking, and 30% is in early-stage tech.

“These are the founders and the high net-worth individuals, the tech shops that would be inclined to get their money out — but the question becomes where they will put it. The impact will be widespread, given that 11% of funds are held internationally,” we wrote.

The SVB news spurred investors to send shares in other banks lower. Ally Bank shares dropped 15.4% last week where Reuters reported that investors embraced defensive positions against several banking names (via put options).

And even some of the marquee names within banking, J.P. Morgan and Citigroup, gave up a respective 7% and 7.7%, while Goldman Sachs rounded out the week 8.2% lower.

The Pay and Be Paid Pillar followed the banking segment’s dip with a 9.2% loss. Affirm lost 23.9%, having noted on its website this week that it is exiting Australia. The BNPL provider launched in that country in 2021 by expanding its partnership with Peloton. As reported earlier this month, Peloton said it would end its relationship with Affirm in Australia and partner with Zip for BNPL financing.

Western Union gave up 13.4%.

PYMNTS reported that Western Union has teamed with MFS Africa to allow mobile money transfers across the continent. Regarding the mechanics of the partnership, Western Union users in 200 countries worldwide send funds to more than 400 million mobile wallets in the MFS network.

The Work pillar was 8.1% lower. DocuSign lost 23.7%. The company reported fourth-quarter results showing total revenue was $659.6 million, an increase of 14% year-over-year. Subscription revenue was $643.7 million, an increase of 14% year-over-year. But looking ahead, management has said that growth should be in the high single-digit percentage points, representing a slowdown. Commentary from the conference call with analysts shows that the macro environment for business spending has not improved.

WeWork shares lost 18.4%.

The New York Times reported that the company is in talks with investors to restructure more than $3 billion in debt and raise cash. The report cited two unnamed sources with knowledge of the discussions. And as reported, SoftBank, WeWork’s largest creditor and largest shareholder, is playing a “key role” in the negotiations.