How a Press Release Doomed Silicon Valley Bank
A jargon-filled press release so awful that it took down the 16th biggest bank in the US — and nearly a chunk of the tech industry with it.
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THIS WEEK IN TECH
How a Press Release Doomed Silicon Valley Bank
This is the story of the worst press release of all time.
A jargon-filled press release so awful that it took down the 16th biggest bank in the US — and nearly a chunk of the tech industry with it.
Myriad factors contributed to Silicon Valley Bank’s epic collapse, but their comms failure is the major part of the story that a lot of people seem to be missing.
From all accounts, what doomed Silicon Valley Bank wasn’t just that it lost some money on securities. It was that it revealed these losses via a press release so poorly timed and triple-stuffed with confusing jargon that it led everyone to believe a viral rumor that the bank was doomed.
The trouble all started last Wednesday, when Silvergate—the largest crypto bank—announced it was liquidating.
This made Wednesday not a good day to divulge these losses because—you know—announcing big financial losses right after another tech industry bank goes under is pretty bad timing. Especially after the whole FTX saga put people on edge.
But rather than taking a breath, carefully crafting their story, and working with industry influencers to shape the narrative, SVB's team yelled YOLO and dropped a monstrosity of a press release—basically 250 words of mind-numbing financial jargon devoid of any narrative about the move, followed by, “Oh, by the way we lost two billion dollars.”
After the release came out, people started connecting SVB’s disclosure to Silvergate and assumed the worst. No one wanted to be left holding the bag, so more investors started to whisper to their portcos to pull their funds. The last straw was when SVB CEO Greg Becker hopped on a conference call and told everyone to “stay calm.”
But by the time Becker spoke out, it was already 2:30 EST. The run was already underway, and telling everyone to calm down only induced more panic.
Humans are storytelling animals. We live in a world of stories. Stories how we understand the world and make the most important decisions in our lives.
Silicon Valley Bank had an opportunity to tell a story that said, “We lost some money on securities, but we are objectively financially sound and taking steps to further fortify our position.”
Doing so would have meant both not only writing an easy-to-understand press release with a clear narrative, but also working with key industry reporters and influencers to translate the news in a reassuring way.
Instead they completely ignored two key audience groups: the media and their customers. There was no story about why the bank was making the move. It was like someone fed ChatGPT a financial disclosure report and blindly pressed publish.
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