Ackman Says US Should Mull SVB Bailout As Possible Option
The US government should consider a “highly dilutive” bailout of SVB Financial Group if a private capital solution can’t be provided, according to Pershing Square founder Bill Ackman.
(Bloomberg) -- The US government should consider a “highly dilutive” bailout of SVB Financial Group if a private capital solution can’t be provided, according to Pershing Square founder Bill Ackman.
Companies backed by venture capital use SVB both for loans and operating cash and a failure of the firm could destroy a crucial long-term impulse for the economy, he said in a series of tweets. The government could also choose to guarantee deposits in exchange for warrants to enable the company to raise new funds, Ackman said.
SVB Financial Group Chief Executive Officer Greg Becker on Thursday moved to quash concern surrounding the bank’s financial position, recommending customers “stay calm.”
SVB Races to Prevent Bank Run as Fund Giants Advise Pulling Cash
The bank’s clients include venture capital investors and Becker asked them to support the lender just as it’s supported them over the past 40 years, according to people familiar with the matter.
Bear Stearns, the investment firm that failed during the 2008 global financial crisis, was later bought by JPMorgan Chase & Co., a move that CEO Jamie Dimon has since said he regrets making.
Ackman, in a subsequent tweet, said any bailout should be designed to protect depositors, “not equity holders or management.”
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(Adds details from subsequent Ackman tweets in sixth paragraph)
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