- Silvergate Capital Corp suspends the dividend on its preferred stock
- Wedbush Securities analyst reiterates his neutral rating on “SI”.
- Silvergate stock has fallen by more than 85% in the past two months.
Silvergate Capital Corp closed at 5.0% on Friday, after the crypto bank withheld its preferred stock dividend.
Silvergate is working to preserve capital
In order to keep capital in check, the company that offers digital currency services is cutting back. It is press release reads:
This decision reflects the Company’s focus on maintaining a highly liquid balance sheet with a strong capital position. The company continues to have a cash position greater than its digital asset customer deposits.
California-based company also confirmed to its Board that it will reevaluate quarterly payments once market conditions improve.
Silvergate stock has fallen over 85% since mid August, partly due to the FTX crash. Billionaire investor Cathie Wood It was almost completely removed at the beginning of the new year.
Are Silvergate stocks worth buying?
A Wedbush Securities analyst said that suspending Series A preferred stock dividends will make it more difficult for the financial infrastructure solutions company in the long-term.
Reiterating his “neutral” rating on the Silvergate stock on Friday, David Chiaverini said:
We believe this move could raise Silvergate’s cost of capital down the road when Silvergate attempts to tap the capital markets for a future capital raise. For any new fixed income or preferred issue, a coupon will be required that is higher.
Its $13 price goal on the stock indicates that there is no upside. Silvergate Capital Corp reported earlier in January that average digital asset customer deposits fell 39% to $7.3 Billion in the fourth quarter, Coin Journal reported.