Last Friday, Roku announced that it has $487 million in cash at the failed Silicon Valley Bank. That came as the federal government seized the Silicon Valley Bank earlier on Friday. Now the U.S. Treasury will back all deposits in the Silicon Valley Bank, meaning Roku will soon get access to its money.
The Federal Deposit Insurance Corp typically only protects $250,000 of deposits. Beyond that, Roku’s money was in danger of being lost. This works out to be about 26% of Roku’s cash reserves.
Roku did say that this will not affect its operations and that Roku is still able to continue.
“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 warned investors. Roku did say the cash they have “will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.”
Roblox Vimeo and many other companies all have found themselves unable to access the cash they have put into the Silicon Valley Bank. FuboTV announced today that it doesn’t have any bank accounts there.
SVB was America’s 6th-largest bank before it was shut down and is the second-largest bank to ever fail in the United States. Roku and others will get access to their money tomorrow, March 13th, 2023.
Here is a statement from the U.S. Treasure about this move:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.