We would love to be in the kind of position where seeing millions of dollars disappear registers an “everything is fine” response. That looks to be the situation that Roblox finds itself in, as the company that owns the multiplayer games platform confirmed that $150M of its funds were stored in a bank that was shut down by California regulators earlier this week.
The bank in question is Silicon Valley Bank, which was abruptly closed by California’s Department of Financial Protection and Innovation due to “inadequate liquidity and insolvency.” The downfall was started when parent company SVB Financial Group sold $21B in bonds in order to try to counter against higher interest rates and “elevated cash burn levels” by customers.
The dissolution of Silicon Valley Bank is noted by CBS News as the largest failure of a financial institution since Washington Mutual’s mortage bond shenanigans in 2008.
The SEC filing notes that the figure represents about 5% of Roblox Corp’s $3B in cash and securities. “Regardless of the ultimate outcome and the timing, this situation will have no impact on the day to day operation of the company,” the filing states. Considering that this is a games company that does the fiscal report version of a shoulder shrug when it loses money, we’d say this response kind of tracks.
What happened to Silicon Valley Bank?
Perfect explanation from @matt_levine in one paragraph: pic.twitter.com/3HY0iQ8zFn
— Alec Stapp (@AlecStapp) March 10, 2023