SVB was shut down after the bank was unable to raise the needed funds to continue operations. The bank had a high amount of uninsured funds and is known for supporting tech startups and venture capital firms.
Mr. Cuban said on Twitter Spaces that his pharmacy platform, Cost Plus Drug Co., had around $3.1 million in the bank, and when it closed he stayed up late trying to open accounts and access the funds. The closure occurred on a Friday, and he spent the next Monday writing checks to make sure payroll and payables were covered, he said.
The federal government stepped in and said it would fully cover all deposits in the bank, even beyond the $250,000 per depositor required, but wouldn’t protect the bank’s shareholders. Mr. Cuban said he was exposed to $8 million to $10 million personally.
New York-based Signature Bank suffered a similar fate to SVB a few days later, and Mr. Cuban said others could follow.
“Other bank runs are a possibility,” he said. “Any of the low-insured deposit percentage banks — if the FDIC doesn’t communicate well on their advanced dividends and what the payouts and returns are going to be for the deposits, then all those other banks are at risk. I don’t think they have the concentration to generate a true bank run.”
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