The World’s richest man and owner of Twitter, Elon Musk has said he is open to acquiring SVB, the US-based bank that has just collapsed.
Elon Musk responded to the question “I think Twitter should buy SVB and become a digital bank”, tweeted by a user by saying he is “open to the idea” of buying the failed bank. However, he did not provide any other details.
Elon Musk’s tweets attracted 76k likes and had been viewed 7.2 million times since he tweeted the response 3. am March 11.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
Silicon Valley Bank (SVB), a tech-focused lender, was closed down by US regulators on Friday due to a rush of deposit outflows.
The bank’s woes were also worsened by failed efforts to raise new capital, marking a significant fall for the company that was valued at more than $44bn less than 18 months ago. The closure has made SVB the second-largest bank failure in US history after Washington Mutual’s collapse in 2008.
The regulator, Federal Deposit Insurance Corporation (FDIC), guarantees bank deposits of up to $250,000 and has guaranteed deposits in SVB, making payouts to depositors with balances exceeding this amount in due course. The UK regulator, the Bank of England has also takeover the UK division of the bank.
If Twitter were to acquire SVB, it could potentially expand its offerings into the financial industry and offer banking services to its users. This move could also generate new revenue streams for the company and increase its competitiveness in the market.
However, there are several regulatory and operational challenges that Twitter would have to address before becoming a digital bank. The banking industry is highly regulated, and acquiring a banking license can be a time-consuming and costly process.
Additionally, operating a bank requires expertise in financial management, risk management, and compliance, which are not Twitter’s core competencies.