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From: lewis.perdue@wineindustryinsight.com

Subject: Special Edition - Rob McMillan Sizes Up The SVB Meltdown + SEC Documents -- March 12, 2023 - WINE INDUSTRY INSIGHT

Date: 2023-03-12 12:04:26

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Rob McMillan Sizes Up The SVB Meltdown + Relevant SEC Documents

The broad details of what is known about the Silicon Valley Bank failure have been covered well by the financial press, who have focused on SVB's technology financing and the pivotal role that venture capital funds seem to have played in the collapse.

In The Beginning

What's known is that SVB quietly filed a form prospectus without specific numbers on March 2 stating its intent to raise new capital.   That was followed by the updated SEC prospectus notice on March 8 stated in two supplements that it intended to sell $1.25 billion of its common stock and $500 million of depositary shares.  

The same day, SVB filed with the SEC an optimistic Message to Stakeholders stating "Today we took strategic actions to strengthen our financial position..." which some in the financial community took as a harbinger of bad news.  

In addition to the prospectus and supplements, SVB filed an extensive and optimistic presentation about the bank.   The blinding speed with which the collapse happened has left SVB clients and the financial world wondering what will happen to them and the fate of the bank's assets.

The Face Of SVB Wine: Rob McMillan

While wine has long been a market outlier in a technology bank, and merits only a mention under "Other" in its client mix (see slide 26 in the SVB presentation), it has been a vital source of financing to a number of wineries, and its annual Wine Industry Report by Senior VP Rob McMillan has been an eagerly awaited assessment of the industry's health, and outlook for the future. That is in doubt, as is the future of of the bank's many employees -- including McMillan as he describes in his latest blog post: Silicon Valley Bank: What comes next?

What Comes Next? -- In McMillan's Own Words

Screenshot 2023-03-12 at 8.51.23 AM  "For those who've read this blog before, you may notice the headline slide has changed from SVB on Wine, to Rob McMillan on Wine. I know I don't need to explain that change. 

  "This is a horrible message for me to have to write. I was asked to stay silent the past few days by SVB but now that the die is cast, I thought I should sit down and share what I know.
  "To start, my employer formerly known as Silicon Valley Bank, no longer exists. I'm still processing the whole  thing as are most people associated with the bank. "On Friday morning, clients, employees, bank suppliers and shareholders all awoke to the same news: SVB has been taken over by the FDIC. For everyone involved, there is a range of emotions to process; fear, anxiety, anger and so much more. I'm personally cycling through all of the same emotions.
  "In the space of 48 hours, SVB went from being a very viable banking organization with sound metrics by all regulatory measures, to being out of business. Investors lost billions, clients had their deposit accounts frozen, and the FDIC halted all banking transactions to stop the panic-driven loss of cash.
"How could that have happened? I never thought I'd see an old-fashioned run on the bank as portrayed in 'It's a Wonderful Life,' let alone find me in the middle of a collapse, but that's the reality. The situation didn't turn out like the movie. "The wine industry had nothing to do with this. This event was an unnecessary fear-based collapse that the Venture Capital industry participated in and is having second thoughts about. One hundred fifty nine VCs are trying to make their voices heard on this disturbing collapse - albeit a little late."

Read McMillan's Full Post At His Site: Silicon Valley Bank: What comes next?

This Special Issue of NewsFetch was hand-crafted for you by Executive Editor, Lewis Perdue.


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