Roku says 26% of its cash reserves are stuck in Silicon Valley bank

  • About $487 million, or 26%, of Roku’s cash reserves are stuck in a Silicon Valley bank, the streamer said in a filing Friday from the SEC.
  • Shares fell hours after the news was released, but the company believes its remaining reserves will be sufficient to meet its financial obligations for at least the next twelve months.

A video banner displays the logo of Roku Inc, a video streaming company powered by Fox, in Times Square after the company’s initial public offering on the Nasdaq market in New York, September 28, 2017.

Brendan McDiarmid | Reuters

The Securities and Exchange Commission’s broadcast media company said Roku has $487 million in cash and cash equivalents in unsecured deposits at a failed Silicon Valley bank. filing Friday.

About 26% of Roku’s $1.9 billion in cash was deposited with SVB, which was placed in receivership by the FDIC at midday Friday.

Roku shares fell more than 4% hours after the news.

“At this time, the company does not know how far the company will be able to recover its SVB funds,” Roku said in a press release.

However, Roku said it believes it will be able to meet its capital commitments “for the next 12 months and beyond” with its $1.4 billion in cash reserves at other “large financial institutions.”

“As stated on our 8-K device, we expect that Roku’s ability to operate and meet its contractual obligations will not be affected,” a Roku spokesperson said in a statement to CNBC.

The collapse of SVB has angered companies large and small alike. As the lender and banker of choice for many Silicon Valley startups and venture capital firms, the company’s receivership has upset founders, who worry about meeting critical payroll and commitments with limited cash on hand.

See also  Dow futures: Amazon slumps on slowing cloud growth; Cloudflare, Snap is taking the plunge

FDIC insurance only covers the first $250,000 in deposit accounts, which is a fraction of the cash Roku and many other companies have raised with SVB.

Leave a Reply

Your email address will not be published. Required fields are marked *