It is tough being a crypto-focused bank. Silvergate (NYSE: SI) stock price plunged to a historic low as concerns about the bank continued. The shares ended the day at $13.5 on Wednesday and then crashed by over 31% after the company delayed its annual report. It plunged to a low of $9.24, meaning that it has declined by more than 95% from its all-time high.
Silvergate gets from bad to worse
Silvergate share price plunged after the company announced that it will delay its annual report, popularly known as Form-10k. In the regulatory filing, the firm said that it did not plan to publish the report by March 16 as it is still facing substantial regulatory scrutiny.
Silvergate, which counts Ken Griffin as an investor, has been in the spotlight because of its role in the crypto industry. The company, which was formerly a commercial regional bank, was the main bank for some of the biggest firms in the industry, including FTX.
Silvergate’s financial results were bad as analysts were expecting. This happened as crypto prices crashed and FTX crashed during the quarter. For example, Silvergate Exchange Network handled crypto worth over $117 billion, down from the $218 billion it processed in Q4 of 2021. Its digital asset customer fees came in at just $6.6 million while leverage commitments were $1.1 billion.
Silvergate stock price, therefore, crashed because of concerns that the company is facing more challenges than expected. Regulators are also circling the company because of its substantial exposure to cryptocurrencies.
This crash means that Ken Griffin has been hit hard since he disclosed a 5.5% stake in the company. Citadel owns about 1.73 million shares worth about $25 million. This investment is mostly in line with its market-making options instead of a directional call for the company. Ken Griffin is widely regarded as one of the top hedge fund manages having made over $16 billion in 2022.
Silvergate stock price forecast
SI chart by TradingView
Silvergate Capital stock price crashed hard in the overnight session as investors reacted to the latest annual report delay. It moved below the important support levels at $11 and at $10. The stock has moved below all moving averages while selling volume has jumped. It remains significantly below the VWAP on the extremely short-term chart.
Therefore, the Silvergate share price will likely continue plunging as sellers target the key support at $8. The stop-loss of this trade is at $11.
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