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.
Astra aborted the launch for NASA ELaNa 41 Mission out of Cape Canaveral on Monday due to what was described as a minor issue, but the company's stock fell nearly 14 percent following the news. Jim Cantrell, CEO and co-founder of Phantom Space, which builds and launches spacecraft of its own, joined Cheddar to discuss the scrubbed mission. “The last thing you want is for this to go wrong, you're better to err on the side of safety expectations,” Cantrell explained, noting that the mission delay was a normal event.
The Biden Administration is set to revise federal rules to address potential security risks from foreign-owned apps, mainly Tiktok. This comes after the White House opted not to pursue a forced shutdown of the Chinese-owned video sharing platform. Under these new rules, federal oversight would be expanded to explicitly include apps that could be used by foreign adversaries to steal or otherwise obtain data. Senior Fellow at the Foundation for Defense of Democracies, Craig Singleton, joined Cheddar to discuss more.
The metaverse platform Decentraland hosted its first wedding over the weekend. The union was overseen by Rose Law Group, at the firm's virtual property, hosting witnesses including 2,000 guests. The ceremony endured some technical glitches before being completed.
The gaming industry has been under the spotlight so far this year following some big mergers and acquisitions. This week featured earnings of three major gaming companies, but also Meta and for the latter, things are not doing too hot. Joining Cheddar News to break it all down was Kenny Rosenblatt, President and Co-Founder of Arkadium.
While it was a volatile week in tech as Meta experienced the biggest one-day drop in the history of the U.S. stock market, industry giant Amazon reported 40 percent growth — largely on the strength of the cloud. Dan Ives, managing director of equity research at Wedbush Securities, joined Cheddar News to break down how the e-commerce company stock managed to pop despite headwinds against its core retail business. "It's all about cloud because of sum of the parts, you could argue, amazon could be $3,500/$4,000 stock just based on cloud," he said. Ives also addressed the apparent the differing impact of Apple iOS changes on Facebook and Snapchat.
Following Ford's earnings miss, the stock price dropped despite a bullish outlook from the auto giant. Karl Brauer, an executive analyst with ISeeCars.com, joined Cheddar to break down why investors may not be sold on the carmaker because of the ongoing factor of supply constraints. "The product is not an issue. There's really good product coming from them, including the electric vehicle side, and the demand is not an issue. There's plenty of demand, but nobody really has a solid grasp on when we're going to get past the supply chain issue," said Brauer.
