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Silvergate shareholders: Who owns SI stock amid cryptocurrencies tumble?

By Rob Griffin

Edited by Jekaterina Drozdovica

16:42, 9 January 2023

Cellphone with logo of American financial services company Silvergate Bank on screen in front of website.
Silvergate is owned by a mix of institutions, retail investors and insiders. Photo: T. Schneider / Shutterstock

Silvergate Capital (SI) has seen its stock price lose 90% over the past year as the fall-out from the FTX crypto exchange collapse has rocked confidence.

The troubled California-based bank saw deposits from digital asset customers fall $8.1bn to $3.8bn in the two months to 31 December 2022. It’s also been affected by US regulators issuing a warning in early January 2023 about the risks related to the crypto-asset sector. 

Silvergate (SI) live stock price

But who are the shareholders of Silvergate, and what are the company’s prospects for the coming year after a torrid 2022? In this SI shareholders analysis, we examine what has happened to the stock price and reveal who are Silvergate's major shareholders.

What is Silvergate? 

Founded back in 1986, Silvergate provides financial infrastructure solutions and services to participants in the nascent and expanding digital currency industry.

The Silvergate Bank opened in 1988. The company began pursuing digital currency customers in 2013. The company’s headquarters are in La Jolla, California.

Silvergate went public on the New York Stock Exchange (NYSE) on 7 November, 2019. It trades under the ticker SI.

Silvergate provides a variety of services to the cryptocurrency sector, including the movement of US dollars and euros to digital currency exchanges. It also offers real-time settlements between counterparties, as well as compliance support for fintech, payments and money services businesses. 

For example, the Silvergate Exchange Network (SEN) enables digital currency and institutional investors to send US dollars and euros to other accounts 24/7, 365 days-a-year.

As Silvergate has stated: “Our mission is to serve entrepreneurs so they can spend more time growing their businesses and less time managing their banking relationships.”
 

Silvergate shareholders: Institutional vs retail

So, who are the shareholders of Silvergate?

Silvergate is owned by a mix of institutions, retail investors and insiders, as of 9 January 2023. According to WallStreetZen data at the time of writing, the split was 77.66%  institutional shareholders, 16.27% retail investors and 6.08% insiders.

Why does this matter? It’s important to know who owns the most shares of Silvergate as this can have an impact on how the business is run.

Having a significant shareholding can give institutions or individuals the power to influence decisions. In some cases, it can help them gain a seat on the company’s board.

Top three institutional shareholders 

Let’s take a look at Silvergate’s biggest shareholders among institutions.

Vanguard

Vanguard was the largest institutional investor in Silvergate with 2,898,115 shares, according to WallStreetZen, as of 9 January. This holding, which was valued at $35.47m, gave it a 9.15% stake.  

Vanguard has been a leading name in passive investment strategies for decades. Its founder, the late Jack Bogle, is credited with introducing the first index tracker funds.

The investment manager also has a unique ownership structure as it belongs to investors in its funds, as opposed to external shareholders.

BlackRock Inc

This is a leading global asset management firm that provides services to a variety of retail, intermediary and institutional clients around the world. 

It was the second largest institutional investor by virtue of the 2,111,902 shares it held at the time of writing. This stock had a value of $25.85m and provided the firm with a 6.67% stake, according to WallStreetZen

BlackRock’s investment solutions range from fundamental and quantitative active management to indexing strategies designed to gain broad exposure to the world’s capital markets. 

State Street Corp

The third largest institutional investor in Silvergate was State Street Corp, according to data compiled by WallStreetZen.

The company, which describes itself as “an essential partner to institutional investors”, had a 5.33% stake in Silvergate through its 1,687,121 shareholding. This stake was valued at $20.65m.

Its management business, State Street Global Advisors, was the world’s fourth-largest asset manager as of January 2023, and a pioneer in exchange traded funds (ETF) and index investing. 

Biggest insider shareholders 

So, who are the most significant insider shareholders of Silvergate?

AMD

181.99 Price
+0.360% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.18

NVDA

129.88 Price
+2.170% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.13

AAPL

230.23 Price
+1.090% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.11

TSLA

249.14 Price
+4.260% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.19

Martin S. Friedman

Martin S. Friedman was the largest individual Silvergate Capital shareholder, with 1.02 million shares representing 3.21% of the company, according to WallStreetZen data. At the time of writing, his shares were valued at $12.43m.

Friedman, who has more than three decades’ experience in finance, is co-founder and chief executive of FJ Capital Management LLC, an SED-registered investment advisor. He served on the board of Silvergate from February 2019 to 24 January 2020.

Dennis Frank

Dennis Frank is the former chairman of Silvergate’s board, having been replaced by Michael Lempres during the summer of 2021. 

He is understood to be president at both Pdl Management Corp and Dsf Management Corp, as well as a member of The Urban Land Institute. 

According to US SEC filings, Frank had 71,437 shares in Silvergate in August 2021. 

Scott Reed

Scott Reed is a partner, director and co-founder of BankCap Partners. He has more than 20 years of experience in financial services and strategic consulting. 

He started his career as a derivatives trader with Swiss Bank Corporation, while subsequent positions have included Bain & Company and Bear Stearns.

As well as serving as a board member of Silvergate, he’s also a director of Xenith Bankshares, a Richmond, Virginia, based commercial bank.

Reed had 50,000 shares in Silvergate, according to SEC filings of October 2021

Latest news on the Silvergate tumble

On 5 January 2023, Silvergate announced results for the three months to the end of December 2022, in which it said the digital asset industry had undergone a transformational shift.

It blamed “significant over-leverage” in the industry for several high profile bankruptcies, which had triggered a “crisis of confidence”. This resulted in total deposits declining to $3.8bn from $11.9bn just two months earlier, at the end of September 2022.

Alan Lane, Silvergate’s chief executive, said: 

“In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset related deposits.”

Downgrade by Moody’s 

The outlook certainly looks challenging for Silvergate shareholders. On 5 January 2023, Moody’s Investors Service downgraded Silvergate

In a statement, it explained the downgrade followed the bank’s announcement of “significantly decreased fintech deposits”, and the crystallisation of large losses driven by the sale of securities to meet its liquidity needs.

It also noted the “impairment of technology assets” associated with a scaling back in its business plan, and the bank’s intention to reduce its workforce by 40%. 

“These events highlight Silvergate Bank's significant operating challenges, in particular the profitability, funding, and liquidity risk associated with amplified deposit volatility driven by uncertainty in the crypto currency market and the bank’s narrow business model,” it stated.

In addition, Moody’s believes the risks to Silvergate's business model and franchise value have increased following the joint statement from US federal banking regulators released earlier this week on crypto-asset risks to banking organisations. 

Outlook for SI stock

The performance of Silvergate’s stock price has been disastrous for Silvergate shareholders over the past year. Its shares have fallen 90% from $128.49 at the beginning of January 2022 to just £12.24 as the market closed on 6 January 2023.

Silvergate stock price, 2019 - 2023

This means it’s back down to its $12 a share initial public offering (IPO) price back in November 2019. This is particularly gloomy when you consider the all-time high closing price of $222.13 was achieved in November 2021. 

So, what is the outlook for shareholders of Silvergate? The stock was rated a ‘hold’, according to the views of 10 Wall Street analysts compiled by TipRanks, as of 9 January. However, opinions were divided. Four of these analysts saw the stock as a ‘buy’, four  a ‘hold’ and two a ‘sell’. Their consensus average price target for the coming year was $19.90, with the highest forecast coming in at $38 and the lowest at $8.

Analysts at Craig-Hallum downgraded the stock from a ‘buy’ to a ‘hold’ on 6 January, 2023, according to MarketBeat. Bank of America also downgraded SI stock to ‘underperform’, while JP Morgan reduced it to ‘neutral’ from ‘overweight’. Meanwhile, Wells Fargo & Company and Canaccord Genuity Group lowered their price targets to $16 and $25, respectively. 

Final thoughts

Note that analysts’ predictions can be wrong and shouldn’t be used as a substitute for your own research. While information about Silvergate shareholders may help in your decision-making, this article does not constitute investment advice. Always conduct your own due diligence before trading, looking at the latest news, technical and fundamental analysis, and a wide range of analysts’ commentary.

Remember that past performance does not guarantee future returns. And never trade more money than you can afford to lose.

FAQs

How many Silvergate shares are there?

Silvergate Capital had 658,603 outstanding shares, according to WallStreetZen data, as of 9 January. 

How many shareholders does Silvergate have?

Silvergate had 568 institutional owners and shareholders that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC), according to Fintel data as of 9 January. These institutions held a total of 29,672,468 shares. 

Who owns Silvergate company?

Silvergate Capital was 77.66% owned by institutional shareholders, 16.27% retail investors, and 6.08% Silvergate Capital insiders, according to WallStreetZen data, as of 9 January. 

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You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
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