Bank Stocks Alert: SVB Financial (SIVBQ) Stock Resumes Trading in Volatile Fashion

  • Silicon Valley Bank’s holding company saw some gains today.
  • However, SVB Financial Group (SIVBQ) didn’t stay in the green for long.
  • Speculative trading clearly isn’t enough to make a shaky stock a buy.
Photo of broken piggy bank with cracks on body and frown being held together by a band-aid. Gray background.

This week, two delisted bank stocks began trading again via the over-the-counter (OTC) exchange. SVB Financial Group (OTCMKTS:SIVBQ) now trades under a different symbol. Meanwhile, Signature Bank (OTCMKTS:SBNY) maintains the same ticker it had on the Nasdaq Exchange.

Given the fact that SVB’s principal subsidiary, Silicon Valley Bank, is blamed for the industry’s worst crisis since 2008 and that SBNY closed its doors after regulators deemed it a “systemic risk,” some investors were likely surprised by this development. But what may be more surprising is the fact both bank stocks were up earlier today.

Although they have since slipped back into the red, these performances warrant a closer look.

What’s Happening With the Delisted Bank Stocks?

Many people probably didn’t expect to see SIVBQ stock pull into the green shortly after its OTC debut. But that’s exactly what it did, rising as high as $1.45 today. SBNY hasn’t done as well, however, only rising slightly and spending most of the day trending downward.

Of these two bank stocks, SIVBQ has made considerably more progress since it began trading over the counter. Still, both names were quick to reverse course today and are poised to end the day firmly in the red.

There haven’t been any positive catalysts to drive these bank stocks up since they became tradable again. As such, it’s clear that today’s gains have been driven mainly by speculative trading. This shouldn’t come as a surprise. As much trouble as the collapse of Silicon Valley Bank caused for the financial sector — and for investors in general — there will always be less risk-averse traders who embrace the companies others won’t go near.

That said, this doesn’t mean either stock is likely to rise again anytime soon. Regulators shut down both companies for posing significant risk to the financial system. While speculative traders are willing to stake bets on SIVBQ stock right now, many will never trust it again.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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