Roku announced over the weekend that the company held roughly $487 million of its $1.9 billion in cash at Silicon Valley Bank (SVB). This translates to about 26% of the company’s cash equivalents being held in the bank, which was was effectively lost during the bank’s failure on Friday.
The company also noted that much of its money in the bank was not FDIC-insured.
“At this time, the company does not know to what extent the company will be able to recover its cash on deposit at SVB,” Roku said in a statement regarding the event.
Roku has stated that it has enough existing cash and cash flow from operations to “meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.”
Earlier this year, the company announced an expansion of its business model with a new line of Roku-branded television displays. The company has also announced an expansion of its popular television OS with added content and functionality for users including a greater library of live sports events and easier access to subscription services on the app.
Alongside Roku, 40,000 customers (most of them tech start-ups within the broader tech industry) have been affected by the collapse of Silicon Valley Bank.
In recent news, however, the government has stated it will be stepping in to restore funds to SVB customers. Janet Yellen, Treasury Secretary, has gone on to state that this is not a bailout of SVB as was the case with other financial institutions in 2008.
At the same time, the federal government has shut down Signature Bank, a regional bank that, following the SVB collapse found itself in a similar, precarious situation as many sought to withdraw their deposits.
SVB’s failure is now considered the second-largest bank failure in US history after a massive 48-hour bank run and capital crisis caused the bank to crumble. In Q4 FY22 the bank was estimated to have $212B in assets. This is only surpassed by the collapse of Washington Mutual in 2008, which had $300B in assets.
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