More than a quarter of Roku’s cash is now at jeopardy due to the abrupt bankruptcy of Silicon Valley Bank. The streaming startup stated in a Friday SEC filing that Silicon Valley Bank held $487 million, or 26% of its cash.
Now that federal regulators have taken control of the financial institution during the second-largest bank failure in American history, the destiny of those funds is uncertain. The majority of the Company’s deposits with SVB are not insured, according to Roku’s disclosure. The company currently has no idea how much of its cash on deposit with SVB it will be able to reclaim.
According to a statement released by the Federal Deposit Insurance Corporation (FDIC) on Friday, “uninsured depositors will get a receivership certificate for the remaining amount of their uninsured monies” and “uninsured depositors will receive an advance payout within the next week.”
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How long that process will take to complete and how much of their uninsured cash corporations will finally be able to recover are both still very uncertain.
But, compared to many of the smaller firms who relied on Silicon Valley Bank, some of which are currently unable to pay their bills or their employees, Roku’s situation is, at least for the time being, significantly less serious.
The corporation stated in its SEC filing that it has more than a billion dollars in cash at various other institutions. “As stated in our 8-K, we expect that Roku’s ability to operate and meet its contractual obligations will not be impacted,” a Roku spokesperson said in a statement to Engadget. “We continue to have access to $1.4 billion in cash and cash equivalents, which are distributed across multiple, large financial institutions.
Once a little-known organisation, Silicon Valley Bank was renowned for its tight ties to startup founders, who made up a large portion of its clientele.
But as Bloomberg’s Matt Levine notes, the bank’s reliance on fixed-rate assets also made it particularly vulnerable to the circumstances that ultimately sparked a run on the organisation on Thursday when well-known venture capitalists pushed founders to withdraw their funds.
In light of the bank’s failure, Roku is not the only significant publicly traded tech business currently experiencing losses. According to the company’s SEC filing, Roblox has $3 billion, or around 5% of its cash, in Silicon Valley Bank.
No matter what happens in the end or when it happens, the company’s daily operations won’t be affected, it stated in a filing. Vimeo, a video hosting service, also stated that it had “less than $250,000” in bank accounts.
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