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Author Topic: Adobe and Silicon Valley Bank  (Read 2772 times)

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« on: March 11, 2023, 06:25 »
Not sure how Adobe is going to be impacted by this but this seems pretty big.

« Reply #1 on: March 11, 2023, 10:22 »
Stand by for more exciting news as we are asked to take a royalty cut to compensate  ;D

« Reply #2 on: March 11, 2023, 10:43 »
Seems it will be a problem for cryptos.
Like the real estate crash 2008, starting at the beginning oaf 2008 and crashed in autumn 2008, we maybe will see an crypto crash 2023 in autumn.
Maybe there will be more debt invested in cryptos than debtor can pay back.
I think some banks involved in crypto investment getting nervous now.
The problem is, if investors invested debt in cryptos and sell now they incur a loss. If they don't sell and cryptos continue to fall they maybe get bankrupt.

« Reply #3 on: March 12, 2023, 14:20 »
Silicon Valley Bank's problems had nothing - zero - to do with crypto. There were a couple of other banks that did - Silvergate  being the major example. You can read more about the two banks here (among many, many other articles)

Regarding Adobe having deposits (likely uninsured) in Silicon Valley Bank, I haven't seen anything saying how much they might have, but if you look at their form 10-K from Dec 2022 (the most recent financial filing; they'll be announcing the Q1 2023 results next week), it says that their cash and cash equivalents are $4.236 billion. See page 53 of the 10-K for the balance sheet. So even if the number quoted in that forum screenshot is accurate, I don't think the 26% of their cash number can be correct.

Adobe overall (of which Adobe Stock is a small part) is a huge company - their 2022 revenue was over $16 billion.

We may or may not see royalty reductions in the future, but I doubt that Silicon Valley Bank's collapse will have anything to do with contributor earnings or Adobe's overall earnings picture.

« Reply #4 on: March 12, 2023, 18:17 »
Everything stems from 2020 when free checks worth $3 Trillion were dropped on the population + 3 more Trillion injected into the economy by the Fed. All this is on top of the regular money printing.

This massive money-printing business generated massive inflation (there is no free lunch -> payback time).
In order to fight inflation, the Fed raised interest rates.
The interest hike triggered a drop in the bond and government obligations, because new bonds yield better interest than the old ones.
Banks are the primary customers for these bonds, and many had to trade the old bonds at a loss (global losses from these investments are currently at over $1 Trillion).
Smaller banks are the most vulnerable. Among them, SVB was incapable to absorb this shock.
There may be more.
« Last Edit: March 12, 2023, 18:29 by Zero Talent »


« Reply #5 on: March 13, 2023, 16:20 »
Totally agree here with Zero. The "free" money by the Fed (and the ECB and every other central bank in the world) induced the inflation and payback time it is.

Regarding Adobe, I don't know what they did. If they just stalled money there then they are safe (since late yesterday evening). If they bought shares or bonds from the company then they are screwed. Or maybe it's just misinformed chatter.

Time will learn.

« Reply #6 on: March 13, 2023, 19:11 »
I think ROKU had $487 mil in SVB, not Adobe:

"Roku said that SVB held 26% of its cash and cash equivalents around $487 million as of Friday, per its filing to the Securities and Exchange Commission (SEC)."


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