• Silvergate, a crypto-friendly bank, announced it is suspending payment of dividends on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A.
• The company is taking this move to help preserve capital following the effects of recent turbulence across the crypto ecosystem.
• Following the announcement, shares of parent company Silvergate Capital (NYSE:SI) fell more than 11% in early morning trading, hitting lows of $12.55.
Crypto-friendly bank Silvergate recently announced that it is suspending payment of dividends on its series A preferred stock, causing its shares to fall more than 11% pre-market. Silvergate is taking this move in an effort to help preserve capital as the company navigates the recent turbulence across the crypto ecosystem.
The company reported a $1 billion loss in the fourth quarter and also cut its staff by 20%, likely due to the crypto bear market and the impact of FTX collapse. The Board of Directors will re-examine the company’s payment of quarterly dividends at a later date, with this dependent on how „market conditions evolve.“
Shares of parent company Silvergate Capital (NYSE:SI) fell more than 11% in early morning trading following the announcement, hitting lows of $12.55. Despite a decent run this week, Silvergate shares are down 50% from their all-time high of $25.61 on January 11th.
The crypto-friendly banking sector has been hit hard over the past few months, as the market downturn has taken its toll on companies in the space. Silvergate’s decision to suspend dividend payments is a sign of just how dire the situation has become for many crypto companies.
With the market showing signs of recovery, Silvergate will be hoping that its decision to suspend dividend payments will help the company preserve enough capital to survive the current market turbulence. While it remains to be seen how the market will develop in the coming months, Silvergate’s decision to suspend dividend payments is a sign of just how precarious the situation is for many companies in the crypto space.