SAN JOSE — Roku has more than one-fourth of its cash at failed Silicon Valley Bank — mainly in uninsured deposits — a disquieting disclosure by the tech titan that hints at wider woes due to the bank’s stunning collapse.
The streaming giant said it’s not sure when — or if — it will get back its deposited cash at Silicon Valley Bank, Roku revealed in a regulatory filing Friday with the Securities and Exchange Commission.
“The company has total cash and cash equivalents of approximately $1.9 billion as of March 10, 2023,” Roku reported in the SEC filing. “Approximately $487 million is held at Silicon Valley Bank.”
That represents an estimated 26% of Roku’s cash and cash equivalents balance as of March 10, the company said.
“The company’s deposits with Silicon Valley Bank are largely uninsured,” Roku stated in the SEC document.
San Jose-based Roku said it wasn’t immediately certain of its ability to recoup its deposits.
“At this time, the company does not know to what extent the company will be able to recover its cash on deposit at Silicon Valley Bank.” the tech company stated in the regulatory disclosure.
About $1.4 billion of Roku’s cash and equivalents are spread across several large financial institutions.
Experts were concerned that the collapse of Silicon Valley Bank, with its deep ties to the tech, biotech and health care industries, would unleash severe cash flow problems on tech startups.
Roku’s disclosure, however, was a reminder that some large tech companies might face considerable financial challenges arising from the meltdown of Silicon Valley Bank.
The FDIC, or Federal Deposit Insurance Corp., swooped in to seize control of Silicon Valley Bank on Friday morning and closed the doors of the failed finance firm.
The federal regulatory body insures deposits of up to $250,000. The amount in an account that exceeds the $250,000 threshold isn’t insured by the FDIC.
“Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds,” the FDIC stated in its announcement about the bank’s shutdown. “As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.”
These future payments, however, appear to reside in a murky area. The payment amounts — and procedures — weren’t precisely defined by the FDIC. This could create a major area of uncertainty for uninsured depositors.
Even worse, some reports suggested that 93% of the deposits at Silicon Valley Bank weren’t insured by the banking regulatory agency.
Despite the murky outlook for the fate of the uninsured deposits, Roku remained optimistic that it still had enough cash to continue operating for the foreseeable future.
“Notwithstanding the closure of Silicon Valley Bank, the company continues to believe that its existing cash and cash equivalents balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond,” Roku stated in the SEC filing.
Source: www.mercurynews.com