Silvergate suspends dividends to preserve 'highly liquid balance sheet'

California-based crypto slope Silvergate has suspended dividend payouts to sphere its “highly liquid equilibrium sheet.”

In a Jan. 27 announcement, the steadfast stated that it is halting “the outgo of dividends connected its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, successful bid to sphere capital.”

The institution outlined that it made the determination truthful that it tin upwind the storm of crypto winter, but did accent that it inactive maintains a “cash presumption successful excess of its integer plus customer-related deposits.”

“This determination reflects the Company’s absorption connected maintaining a highly liquid equilibrium expanse with a beardown superior presumption arsenic it navigates caller volatility successful the integer plus industry.”

“The Company’s Board of Directors volition re-evaluate the outgo of quarterly dividends arsenic marketplace conditions evolve,” the steadfast added.

The announcement comes conscionable 11 days aft the institution posted a hefty $1 cardinal nett nonaccomplishment in its Q4 2022 study connected Jan. 17. Silvergate attributed its mediocre show to the wide sour marketplace sentiment which has seen investors opt for a “risk-off” attack implicit the past year. 

In the Q4 report, Silvegate CEO Alan Lane besides utilized akin connection to the latest announcement, noting that the institution is inactive bullish connected the crypto assemblage but is moving to support “a highly liquid equilibrium expanse with a beardown superior position.”

The quality of suspended dividends connected Friday was met with notable losses successful some its preferred (SI-PA) and communal (SI) banal prices.

According to information from Yahoo Finance, the terms of SI-PA dropped by 22.71% to $8.85, portion SI declined by 3.76% to beryllium astatine $13.58 by marketplace close.

Zooming retired besides paints a grim representation for SI-PA and SI, with the stock prices declining by 60% and 87.46% implicit the past 12 months.

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This is not the lone enactment the steadfast has taken to enactment up its coffers this month, aft it announced connected Jan. 5 that it had laid disconnected 200 employees — representing 40% of its headcount — successful a bid to support afloat.