Roblox (RBLX) has revealed that approximately 5% of its $3 billion cash and securities balance as of February 28 were held at SVB Financial Group (SIVB), the troubled startup-focused bank. The disclosure comes after similar revelations by other tech companies, including Roku, which disclosed that 26% of its cash and cash equivalents were held at SVB.
Despite the exposure to the closed bank, Roblox reassured investors that the situation would have no impact on the day-to-day operations of the company. Nevertheless, shares fell nearly 1% in after-hours Friday trading, reflecting investor concern over the potential risks from the situation.
Like other tech companies, Roblox has been under pressure in recent weeks amid a broader selloff in technology stocks. The news of its exposure to SVB is likely to add to investor concerns about the company’s financial stability, particularly given the uncertainty surrounding the fate of the funds held at the troubled bank.
While the situation at SVB remains uncertain, other banks have sought to reassure investors about their own liquidity and deposits. First Republic Bank (FRC) and Western Alliance (WAL) both issued statements on Friday stating that their liquidity and deposits remained strong, despite the problems at SVB.
In the case of Roblox, the company’s exposure to SVB represents a small fraction of its overall cash and securities balance. Nevertheless, the situation highlights the potential risks that can arise from holding funds at smaller, less established financial institutions.
In conclusion, Roblox’s disclosure of its exposure to SVB is likely to add to investor concerns about the company’s financial stability. However, the company has reassured investors that the situation will have no impact on its day-to-day operations. The situation at SVB remains uncertain, but other banks have sought to reassure investors about their own liquidity and deposits.
