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At the end of last week Silicon Valley Bank (SVB) was declared a failed bank, this surprised many people.
Including his own employees. One of the SVB employees even said that the steps taken by their CEO, Greg Becker, were stupid.
He said Becker's move to openly admit the extent of the bank's financial problems was a step that made no sense. That was before he personally arranged the financial support needed to ride out the storm.
"That's just plain stupid," said the employee who works on the asset management side of Silicon Valley Bank, quoted by CNN, Tuesday (14/3/2023).
"They were very transparent. It's the opposite of what you usually see in a scandal. But their transparency and honesty worked," he continued.
Becker and his team expressed Wednesday night a hope but no firm commitment to a $2.25 billion capital increase. Also, the sale of assets of US$ 21 billion triggered a loss of US$ 1.8 billion.
The news sparked a wave of fear in Silicon Valley. Many of them panicked and pulled out $42 billion last Thursday when Silicon Valley Bank shares plunged 60%.
By the close of business, Silicon Valley Bank had a negative cash balance of around US$958 million.
"People are shocked at how stupid the CEO is," said a Silicon Valley Bank insider.
"You've been in business for 40 years and you're telling me you can't raise $2 billion privately?" he said.
Silicon Valley Bank did not respond. However, Becker has reportedly apologized to employees about the situation.
"It is with a very heavy heart that I am here to deliver this message. I can't imagine what's going through your head and wondering, you know, about your job, your future," Becker said.