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Shares of Silvergate Capital (NYSE:SI) are down a further 8% in pre-market Friday after dropping nearly 43% yesterday.
Shared crashed after the company witnessed a large decline in deposits following the FTX collapse. As a result, Silveragate announced it is laying off 40% of its staff.
At least 3 sell-side analysts slashed their ratings on Silvergate stock with Bank of America analysts downgrading to Underperform with a new price target of $8 per share (down from the prior $37), which implies a downside risk of over 35% relative to yesterday’s closing price of $12.57.
“Future regulatory and legislative actions – especially given the bank’s ties to and due diligence of FTX/Alameda Research – may not be fully recognized by the market,” they wrote in a client note.
JPMorgan analysts also downgraded shares as they went to Neutral from Overweight with a $14 per share price target.
“While one could argue that the shares remain cheap on the surface, given the wildcards associated with the medium- as well as long-term impacts to the business, we see upside potential being fairly limited until the earnings power of the franchise is better understood,” they said.
Elsewhere, Craig-Hallum analysts cut their rating on SI stock to Hold.
