Many bank stocks are falling today, but one unexpected name is skyrocketing. Silvergate Capital (NYSE:SI), a former top bank for the crypto sector, announced two weeks ago that it would be shutting down operations. This news sent SI stock into a nosedive that continued until today.
Shares have been rising steadily since markets opened today on rumors of a new deal. According to BenzingaPro, a crypto exchange may be considering buying Silvergate’s trade processing technology. While this rumor has been gaining traction on social media, Silvergate has not issued a statement on it. Furthermore, no one seems to know who the mysterious buyer would be.
What does this mean for the bank that many investors had written off? Let’s take a look at what we know so far.
What’s Happening With SI Stock?
As of this writing, SI stock is up 76% for the day. It previously lost some ground, slipping back below $2 per share but has since regained all momentum and looks poised to keep rising even higher. For a company that has lost more than 97% of its value over the past six months, this type of surge is noteworthy. However, it is not likely to be sustainable.
Unlike some of its peers, Silvergate Capital’s problems didn’t start with the March 10 run on SVB Financial’s (NASDAQ:SIVB) principal subsidiary, Silicon Valley Bank. SI stock began the month by plunging deep into the red when the company issued a warning that it would be missing an important filing deadline. This sent the stock into a race to the bottom until today.
At present, very little is known about the potential deal that is pushing SI stock up today. BenzingaPro did not provide any details regarding the crypto exchange that is alleging looking to acquire Silvergate’s technology. Until one of the companies provides an official statement on the deal, it will be hard for investors to feel too confident about the fallen bank’s sudden winning streak.
On the date of publication, Samuel O’Brient did not have (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 InvestorPlace.com Publishing Guidelines.