(NewsHill.org)- Despite warnings from his capital venture firm to pull out deposits from Silicon Valley Bank, conservative entrepreneur Peter Thiel kept $50 million in his account, according to The Daily Wire. Talking to the Financial Times, Thiel said that he did not think the bank was going to fail.
Following the bank run, withdrawals resulted in a 60% nosedive in the bank’s stock, according to The New York Times. Regulators then seized control and the FDIC was named SVB’s receiver, assuming management of $212 billion in assets. Thiel’s account was reportedly frozen when the FDIC took control, but his funds are now able to be withdrawn after the Federal Reserve stepped in to provide assistance with emergency funds.
The collapse began when SVB told shareholders that they were conducting a share sale on the heels of a liquidation of a $21 billion bond portfolio that incurred severe losses. Founders Fund, which Thiel co-founded, then withdrew their investments and issued calls to their portfolio companies to do the same.
CFO Neil Ruthven told Axios that the morning after SVB’s announcement, there was an obvious bank run, and reacted accordingly. Other capital funds have since moved their money back into SVB as the FDIC retains control. They have also advised their portfolio companies to follow suit. In a memo, CEO Tim Mayopoulos stated that deposits will help the bank rebuild.
Amid the collapse of SVB, there are fears surrounding the future of regional banks and whether there is going to be a consolidation. In the aftermath, multinational banks such as Wells Fargo and Citigroup have experienced an influx of deposits from customers.
The 40-year-old institution’s collapse is the second-largest crash since 2008. Uninsured consumers will reportedly receive an advanced dividend and additional dividends as the bank’s assets are sold in the coming weeks, according to CNBC.