The sudden collapse of the Silicon Valley bank has put more than a quarter of Roku’s funds at risk. The streaming company had $487 million, representing 26 percent of its cash, in a Silicon Valley bank, the company revealed in a report. SEC filing Friday.
The future of these funds is now as uncertain as federal regulators have been taken over Central financial institution second largest Bank collapse in US history. “The company’s deposits with SVB are largely uninsured,” Roku wrote in its filing. “At this time, the company does not know to what extent the company will be able to recover cash deposited with SVB.”
In a statement Friday, the FDIC said it would pay “uninsured depositors an advance return within the next week” and that “uninsured depositors will receive a custodial certificate for the remaining amount of their uninsured funds.” But there’s still a lot of uncertainty about how long that process will take to finish, and how much of the uninsured money their companies will eventually be able to recover.
Still, Roku’s situation is, at least for the time being, far less precarious than many of the smaller startups that have relied on Silicon Valley Banking, some of which are now unable to. to pay their bills or employees.
In the SEC filing, the company indicated that it had more than $1 billion in cash in several other banks. “As stated in the 8-K program, we expect that Roku’s ability to operate and meet its contractual obligations will not be affected, and we continue to receive $1.4 billion in cash and cash equivalents that is distributed across several large financial institutions,” a Roku spokesperson said in a statement to Engadget.
While previously a little-known institution, Silicon Valley Bank was known for its close relationships with startup founders, who made up much of its clients. But as bloomberg Matt Levine ExplainThe bank’s reliance on fixed-rate assets also made it uniquely vulnerable to the conditions that ultimately led to it employment in the bank on Thursday after prominent venture capitalists urged the founders to move their money out of the institution.
Roku isn’t the only major public technology company now facing losses as a result of the bank crash. The company said Roblox has $3 billion, about 5 percent of its cash, in a Silicon Valley bank Supreme Education Council. “Regardless of the final outcome and timing, this situation will have no impact on the company’s day-to-day operations,” she wrote in a filing. Vimeo video service too a statement that she had “less than $250,000” with the bank.
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