Another proof how smart this guy is ? Or for those who hate him, he might be te reason of its collapse
Regardless, he definitely helped contribute to its collapse, as well as everyone else who took their money out of the bank during the run. To what degree is Peter Thiel responsible? I don't know and I don't think it really matters.
There were public discussions about the bank's issues months ago:
https://twitter.com/RagingVentures/status/161582608803847373...
The difference here is likely insider information. It's obvious Mr. Thiel is well connected and so it's not likely he made this decision uniformed beyond the normal flow of chatter. The question is if he was tipped off and had insider information is that even illegal in this context?
Source? I feel like every time this gets brought up, it turns out that it was part of a rule 10b5-1 sale (ie. it was scheduled months/years in advance), because if you actually thought the company was going to go under pretty soon, dumping stock will look so suspicious.
Basically, from this [0] article:
"This general prohibition addresses a significant loophole in the current Rule 10b5-1, which permits insiders to adopt multiple trading plans and selectively cancel certain plans based on material nonpublic information."
So it looks like 10b5-1 was supposed to change. But I'm not aware that it did. Regardless 10b5-1 was just a cover so they couldn't be prosecuted for insider trading as it was operating.
[0] https://www.reuters.com/legal/legalindustry/secs-run-revampi...
"Silicon Valley Bank Chief Executive Officer Greg Becker sold $3.6 million of company stock under a trading plan less than two weeks before the firm disclosed extensive losses that led to its failure.
The sale of 12,451 shares on Feb. 27 was the first time in more than a year that Becker had sold shares in parent company SVB Financial Group, according to regulatory filings. He filed the plan that allowed him to sell the shares on Jan. 26."
...and...
"“While Becker may not have anticipated the bank run on Jan. 26 when he adopted the plan, the capital raise is material,” said Dan Taylor, a professor at the University of Pennsylvania’s Wharton School who studies corporate trading disclosures. “If they were in discussion for a capital raise at the time the plan was adopted, that is highly problematic.”"
Apparently the new rules go into effect on April 1st. How convenient, and ironic.
[0] https://news.bloomberglaw.com/bankruptcy-law/svb-ceo-no-long... [1] https://www.bloomberg.com/news/articles/2023-03-10/svb-chief...
Withdrawing their funds was the action that both short-term game theory and act-utilitarianism would point to,[3] so it seems like a no-brainer that Thiel would have his organization pull their funds immediately. If they saw transaction oddities as well, it's even more understandable.
[1] e.g. https://techcrunch.com/2023/03/09/silicon-valley-banks-share...
[2] "If everybody is telling each other that SVB is in trouble, that will be a challenge.", "stay calm. That’s my ask.", etc.
[3] I'm more of a rule-utilitarian/long view person myself, but it's a lot harder to use that approach in this kind of scenario.
It was probably also a smart move to remove the funds, but I'm not sure it was sensible for someone with his level of influence to encourage a bank run. Even if you believe a bank run is likely telling people to withdrawal their funds doesn't solve the problem that some people will be too late. If you want to help you should try to ease nerves if anything.
Why would Thiel want to "help"? The bank literally put customer's deposits at risk.
If they were genuinely solvent, their business would have been completely impervious to all sorts of rumours (whether true or false).