The fallout from the collapse of Silicon Valley Bank is only just beginning as Roku says it could lose $487 million in deposits. Roku released a filing on March 10 detailing how the FDIC has taken over SVB and that “all insured depositors of SVB will have full access to their funds no later than the morning of March 13. However, the company also said in its filing that “The Company’s deposits with SVB are largely uninsured,” and that, “At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB.”
Meanwhile, the FDIC stated it “will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of SVB, future dividend payments may be made to uninsured depositors.”
From the Roku filing:
“The Company has total cash and cash equivalents of approximately $1.9 billion as of March 10, 2023. Approximately $487 million is held at SVB, which represents approximately 26% of the Company’s cash and cash equivalents balance as of March 10, 2023. Approximately $1.4 billion of the Company’s cash and cash equivalents is distributed across multiple large financial institutions. The Company’s deposits with SVB are largely uninsured. At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB.
Notwithstanding the closure of SVB, the Company continues to believe that its existing cash and cash equivalents balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.“
The aforementioned $487 million represents just over a quarter of the company’s total funds so the damage from those lost funds would likely be impactful to it and investors alike but the company issued a statement to Engadget saying that would not be so.
“As stated in our 8-K, we expect that Roku’s ability to operate and meet its contractual obligations will not be impacted and we continue to have access to $1.4 billion in cash and cash equivalents which are distributed across multiple, large financial institutions,” a Roku spokesperson said in a statement to Engadget.”
Despite that large number, Roku’s potential losses are a mere drop in the bucket compared to Roblox which reportedly had $3 billion in the bank but that is said only be about five percent of its cash. One other company, video streaming service provider Vimeo, said it had “less than $250,000” with SVB. Meanwhile, CNBC reported smaller companies have been left scrambling to pay bills and their employee’s payroll.