SVB Insider: Employees Angry With CEO Greg Becker
An employee called their boss's actions "absolutely idiotic."
Greg Becker, Silicon Valley Bank CEO and his team disclosed last Wednesday night that they had hoped to raise $2.25billion in capital and sell $21billion in assets. However, they suffered a $1.8billion loss. Customers rushed to withdraw their money from the bank after the announcement. The news shocked tech startups and they pulled $42 billion from SVB.
CNN spoke with an anonymous Silicon Valley Bank employee who was "dumbfounded" at Becker's handling. The news outlet also noted that the CEO's public acknowledgement of how bad the situation was played a part in the bank's collapse. According to the employee, Becker's actions were "absolutely stupid".
Although Silicon Valley Bank didn't respond to CNNs request for comment, Becker made an apology to employees via a video message on Friday.
According to unnamed sources, "They were being very transparent," which is "the exact opposite what you would normally see in a scandal." Their transparency and forthrightness allowed them to in."
CNN quoted Jeff Sonnenfeld (CEO Yale School of Management) and Steven Tian (research director), who stated that they believed that Wednesday's $2.25 Billion capital raise was unnecessary and that the $1.8 Billion loss announcement could have been spread over several weeks.
Tian and Sonnenfeld claim that the failure of Silicon Valley Bank was directly due to the Fed's "persistence and excessive interest rate rises". Before the crisis, the bank publicly acknowledged its financial problems and secured financial support. The bank was forced to withdraw billions of dollars due to panic.