The sudden collapse of Silicon Valley Bank has left more than a quarter of Roku’s cash at risk. The streaming company had $487 million, or 26 percent of its cash, in Silicon Valley Bank, the company announced in a press release SEC Filing Friday.
The future of these funds is now uncertain, as have federal regulators accepted the financial institution among the second largest bank collapse in the history of the United States. “Most of the company’s deposits with SVB are uninsured,” Roku wrote in his filing. “At this stage, the company does not know the extent to which the company will be able to recover its cash deposits with SVB.”
In a statement Friday, the Federal Deposit Insurance Corporation (FDIC) said it “will pay uninsured depositors an advance dividend within the next week” and that “uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds.” But there’s still a lot of uncertainty about how long this process will take and how much of their uninsured funds companies can ultimately recover.
However, Roku’s situation, at least for now, is much less dire than that of many of the smaller startups that have relied on Silicon Valley Bank, some of which are now inept pay their bills or their employees.
In its SEC filing, the company noted that it has more than $1 billion in cash at several other banks. “As indicated in our 8-K, we expect Roku’s ability to continue operating and its contractual obligations to be unaffected and we will continue to have access to $1.4 billion in cash and cash equivalents attributable to several major financial institutions are spread out,” a Roku spokesperson said in a statement to Engadget.
While previously a little-known institution, Silicon Valley Bank was known for its deep relationships with startup founders, who made up a majority of its clientele. But Bloomberg’s Matt Levine explainedthe bank’s reliance on fixed income assets also made it uniquely exposed to the conditions that ultimately led to it enema in the bank Thursday after prominent venture capitalists urged the founders to remove their money from the institution.
Roku isn’t the only big public tech company now facing losses as a result of the bank’s collapse. Roblox had $3 billion, about 5 percent of its cash, in Silicon Valley Bank, the company said this. “Regardless of the ultimate outcome and timing, this situation will have no impact on the day-to-day operations of the company,” a filing said. Also the video service Vimeo disclosed that it had “less than $250,000” in the bank.
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