SBNY - Hot Stocks: SIVB plunges 60% leads banks lower; SI crashes; ASAN surges on earnings news

2023-03-09 17:52:19 ET

Entrenched concerns about the Federal Reserve weighed on stocks again on Thursday, as the major U.S. equity averages resumed losses seen earlier in the week. With investors looking ahead to Friday's monthly employment report, the S&P 500 dropped 1.9%.

Financial stocks were among the hardest hit by Thursday's selling. This was prompted by SVB Financial ( NASDAQ: SIVB ), which lost three-fifths of its value after announcing a balance sheet restructuring meant to prepare for higher interest rates.

Banks in general lost ground. The broad-based selling in the group included slides from Bank of America ( BAC ), Wells Fargo ( WFC ), JPMorgan Chase ( JPM ), Citi ( C ), PacWest Bancorp ( PACW ), First Republic Bank ( FRC ), Signature Bank ( SBNY ), M&T Bank ( MTB ) and Bank of Hawaii ( BOH ).

Elsewhere, Silvergate Capital ( SI ) made news again, accelerating a longer-term retreat amid news that it is liquidating Silvergate Bank. This prompted a slide of more than 40%.

Even amid a generally dismal day for stocks, there were some bright spots. These included Asana ( ASAN ), which jumped nearly 20% after announcing Street-beating results.

Standout Gainer

Asana ( ASAN ) surged 19% after the company reported better-than-expected Q4 results . Shares of the maker of workflow management software also got a boost from news that the firm's CEO plans to buy more stock in the company.

ASAN reported a narrower-than-expected loss for Q4, with revenue that jumped 34% to $150M. The company also gave an upbeat forecast, predicting a loss for Q1 of $0.18-$0.19 per share, compared to analysts' expectation of a loss of $0.23 per share.

Bolstered by the earnings news, ASAN jumped $3.37 to close at $21.17. This added to a recent upswing, with the stock now up about 46% over the past month, rising to its highest close since November.

Still, with losses posted during 2022, ASAN remains about 44% lower over the past year.

Standout Decliner

Silvergate Capital ( SI ) endured severe selling pressure after the company revealed that it will voluntarily liquidate Silvergate Bank. Shares of the crypto-focused financial institution dropped 42%

"In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of bank operations and a voluntary liquidation of the bank is the best path forward," the company said. SI said the liquidation plan includes full repayment of all deposits.

On the news, SI plunged $2.07 to close at $2.84. During the day, shares touched an intraday 52-week low of $2.81. This added to a longer-term downtrend. The stock, which once traded at a 52-week high of $162.64, has lost 98% of its value in the past year.

Notable New Low

A balance sheet restructuring and a lowered forecast triggered a mass exodus from SVB Financial ( SIVB ). Shares of the parent of Silicon Valley Bank cratered 60% to reach a new 52-week low.

As part of the restructuring, SIVB announced that it sold substantially all of its available-for-sale, or AFS, securities portfolio. Meanwhile, the firm announced plans to offer $1.25B of stock and $500M of preferred depositary shares in public offerings.

"We took these actions because we expect continued higher interest rates, pressured public and private markets, and elevated cash burn levels from our clients as they invest in their businesses," the company said in a presentation to investors .

With selling pressure mounting through much of the day, SIVB sank to an intraday 52-week low of $100. Shares rebounded a bit before the close but still finished at $106.04, a decline of $161.79 on the session.

The stock had posted gains earlier in the year but Thursday's plunge more than reversed that upswing. Adding to weakness seen in 2022, SIVB has now fallen about 80% over the past 12 months.

Sector In Focus

The news out of SVB Financial ( SIVB ) sent shockwaves throughout the financial sector , with banks suffering especially steep declines. The KBW Bank Index ( BKX ) plunged almost 8%.

Among big-name financial institutions, Bank of America ( BAC ) and Wells Fargo ( WFC ) dropped more than 6%, while JPMorgan Chase ( JPM ) retreated more than 5%. Citi ( C ) suffered a slide of about 4%.

Elsewhere, PacWest Bancorp ( PACW ) crashed more than 25%, First Republic Bank ( FRC ) plummeted nearly 17% and Signature Bank ( SBNY ) slumped more than 12%. All three also touched new intraday 52-week lows during the session, as did M&T Bank ( MTB ) and Bank of Hawaii ( BOH ), among many other names in the space.

For more of the day's biggest winners and losers, head over to Seeking Alpha's On The Move section .

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