VFH - SVB Financial Is Down Nearly 66% This Year; Management's Guidance Is to Blame
The stock price of SVB Financial Group (NASDAQ: SIVB) , better known as Silicon Valley Bank, is down about 66% so far in 2022. The bank has been a huge disappointment in what is normally a fairly pedestrian financial services industry, and this year's drop has nearly erased three years' worth of above-average returns. For comparison, the Vanguard Financials ETF (NYSEMKT: VFH) is down just 17.5% this year.
Silicon Valley Bank's customer base is undergoing some trying times right now as interest rates aggressively rise. But the primary reason for the precipitous fall has to do with management's poor financial guidance.
The bear market of 2022 has been hastened by the Federal Reserve's record pace of interest rate hikes. Higher rates lower the present value of stocks and other risk assets.
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SVB Financial Is Down Nearly 66% This Year; Management's Guidance Is to Blame