Is Silvergate stock a buy after it suspended preferred stock dividend

Silvergate Capital Corp suspends dividend on its preferred stock.
Wedbush Securities analyst reiterates his impartial ranking on “SI”.
Silvergate stock is at the moment down over 85% since mid-August.

Silvergate Capital Corp ended 5.0% down on Friday after the crypto financial institution suspended dividend on its preferred stock.

Silvergate is attempting to protect capital

The embattled digital foreign money providers firm is reducing again on the payout to protect capital. Its press launch reads:

This choice displays the Company’s deal with sustaining a extremely liquid stability sheet with a robust capital place. Company continues to keep up a money place in extra of its digital asset buyer associated deposits.

The California-based firm additionally confirmed that its Board will re-evaluate the quarterly fee as soon as market situations enhance.

Silvergate stock has misplaced over 85% since mid-August, associated partially to the FTX collapse. Consequently, billionaire investor Cathie Wood virtually completely pulled out of it firstly of the brand new yr.

Is Silvergate stock a buy?

According to a Wedbush Securities analyst, suspending Series A preferred stock dividend will make issues harder for this monetary infrastructure options agency in the long term.

Reiterating his “neutral” ranking on the Silvergate stock on Friday, David Chiaverini mentioned:

We consider this transfer might increase Silvergate’s price of capital down the street when Silvergate makes an attempt to faucet the capital markets for a future capital increase. Any new fastened revenue or preferred issuance would require a increased coupon.

His $13 worth goal on the stock suggests it lacks any upside in anyway. Earlier in January, Silvergate Capital Corp mentioned common deposits from digital asset prospects tanked 39% to $7.3 billion in its fourth quarter as Coin Journal reported right here.