Silvergate Capital (NYSE:SI) stock rocketed as a lot as 27.5% earlier in Tuesday’s session as BTIG analyst Mark Palmer nonetheless justified the cryptocurrency-focused financial institution with a Buy ranking even after posting poor Q4 results.
Some of the important thing takeaways from Silvergate’s (SI) worse-than-expected Q4, stemmed from the broad market downturn, was a major drop in deposits from the prior quarter and a subsequent climb in the price of deposits. Also, its Silvergate Exchange community dealt with virtually 50% much less in U.S. greenback transfers versus a yr earlier than, although USD transfers drifted up 4% sequentially.
Its results for the quarter additionally included a $751M loss on securities along with a $134.5M impairment cost on securities it intends to promote throughout Q1 to cut back wholesale borrowing. On Jan. 5, SI disclosed its preliminary Q4 results, which included a cost-cutting transfer to cut back headcount by round 40%.
And given the uncertainty of its future earnings, the corporate took a 100% valuation allowance on its $342M deferred tax asset stability, Palmer famous, the extent of which was higher than anticipated reflecting “a really conservative therapy of its DTA even in mild of the challenges it faces.”
Meanwhile, SI’s positive factors from earlier within the session have largely been erased, now up 5.6% at 12:24 p.m. ET. The stock is off some 90% from a yr earlier.
Just earlier than SI issued its Q4 earnings, Seeking Alpha contributor Nelson Alves contended that the corporate is a “prime” takeover goal given the losses incurred and the repricing on its stock.