Why the Shine Was off Silvergate Capital Stock This Week
It's bad when your company is the target of an analyst downgrade. It's even worse when it lands on the radar of skeptical, high-powered politicians. Unfortunate financial services company Silvergate Capital (NYSE: SI) suffered both indignities this week. As a result, the company's share price plummeted by more than 19% over the past five trading days, according to data compiled by S&P Global Market Intelligence.
It probably goes nearly without saying that Silvergate's downgrade and the unwanted political attention stem from the potential fallout of the FTX collapse. Monday morning before market open, Morgan Stanley analyst Manank Gosalia dropped his recommendation one peg to underweight (sell, in other words) from his previous equalweight (neutral), citing the "ongoing stress in the crypto ecosystem" due to FTX's swoon.
The next pain point came later that day when Senators Elizabeth Warren, John Kennedy, and Roger Marshall wrote a letter to Silvergate's CEO Alan Lane. The politicians requested information on the company's relationship with FTX and other entities -- such as Alameda Research -- associated with its founder Sam Bankman-Fried.
Source Fool.com
