Fallout from Silicon Valley Bank (SVB) collapse so far seems to be contained but the bank failure has had some ramifications for businesses with deposits at the financial institution.
Roku was among those impacted, having around 26 percent of its cash and cash equivalents deposited at the bank. Around $487 million of its total $1.9 billion was in limbo before the government stepped in and said that the bank's clients would be able to recover their deposits in full.
News of the collapse initially plunged Roku's stock by as much as 9.2 percent on Monday, but it rebounded after President Joe Biden said the FDIC would protect impacted customers.
"First, all customers who had deposits in these banks can rest assured … they'll be protected and they'll have access to their money as of today," Biden said in a statement. "No losses will be borne by the taxpayers. Instead the money will come from the fees that banks pay into the Deposit Insurance Fund."
Even without the FDIC backing, Roku indicated to Cheddar News from SXSW that it had enough cash on hand to stay afloat.
"So we filed an 8-K and that's really the totality of our public statement right now. In it, we did say that we're confident that we have the cash balances to meet all of our obligations. That's our public statement right now," Julian Mintz, co-head of U.S. brand sales at Roku, said.
In an effort to avoid a potential financial crisis, global banking leader HSBC acquired SVB in the UK in order to protect a swath of British tech companies.
Meanwhile, the Federal Reserve announced on Monday that it is currently reviewing its own part in overseeing the failure of Silicon Valley Bank and it would have a report by May 1.
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The virtual world of the metaverse continues to present a bright future for many artistic creators. A group of six mural artists from the Bay Area have decided to turn their painted and installed murals into a one-of-a-kind collectible. Thanks to NFTS these murals can be enhanced and extend far beyond just their physical walls. Muralist and Creative Director of the Bay Area mural program Rachel Wolfe Goldsmith, joined Cheddar to discuss more.
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