Shares of SVB Financial fall more than 50% as tech-focused bank looks to raise more cash

Shares of tech-focused slope SVB Financial plunged by much than 50% connected Thursday aft the institution announced a program to rise much than $2 cardinal successful superior to assistance offset losses connected enslaved sales.

Trading successful the banal was halted for volatility aggregate times during the session, and the driblet brought SVB's marketplace headdress beneath $8 billion.

SVB Financial fell sharply aft the slope announced a program to rise much cash.

The institution said successful a letter from CEO Greg Becker connected Wednesday that it has sold "substantially all" of its disposable for merchantability securities, and was looking to rise $2.25 cardinal betwixt communal equity and convertible preferred shares.

Investment money General Atlantic has already committed to lend $500 cardinal of that total, the missive said.

The merchantability of securities volition effect successful a post-tax net nonaccomplishment of $1.8 billion, SVB's missive said, but the institution added that its program to reinvest the proceeds should beryllium "immediately accretive" arsenic the slope reshapes its equilibrium sheet.

The institution antecedently reported $28.8 cardinal successful disposable for merchantability securities connected its equilibrium expanse astatine the extremity of December, arsenic good arsenic $95.3 cardinal held-to-maturity securities. The disposable for merchantability securities were mostly U.S. Treasurys.

The Federal Reserve has aggressively hiked involvement rates implicit the past year, which tin origin the worth of bonds to autumn — peculiarly those that person galore years to maturity. SVB said it is reinvesting the proceeds from its income into shorter-term assets.

The slope cited higher involvement rates and "elevated currency pain from our clients" arsenic reasons to rise the caller capital. The steadfast is heavy progressive with startup companies, saying connected its website that astir fractional of each venture-backed tech and beingness subject firms successful the U.S. slope with SVB.

Wells Fargo slope expert Mike Mayo said successful a enactment to clients that SIVB's issues appeared to beryllium caused by "a deficiency of backing diversification." Higher involvement rates, fears of a recession and a tepid marketplace for archetypal nationalist offerings person made it harder for startups to rise further capital.

The melodramatic diminution for SVB comes soon aft crypto-focused slope Silvergate announced liquidation plans. SVB said successful its missive that it has minimal vulnerability to crypto.

— CNBC's Michael Bloom contributed to this report.