By Ernest Dela Aglanu, Benzinga
The recent collapse of Silicon Valley Bank (SVB) has sent shock waves through the financial community. The bank, which had been a major player in the venture capital world for over 40 years, was closed by regulators on March 10 after a run on deposits by panicked customers.
The bank reported that it needed to raise $2.25 billion, sparking panic among the bank’s investors and customers. When SVB subsequently halted trading on its plummeting stock, there was a mad rush among depositors to withdraw their money.
The collapse of the bank, the second-largest bank failure in U.S. history and the largest since the 2008 financial crisis, has seen a swarm of customers shifting their accounts to large banks such as JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C) and Bank of America (NYSE: BAC).
But as the dust settles on this once-mighty institution, many are left wondering what went wrong, especially as Credit Suisse (NYSE: CS) and Signature Bank (NASDAQ: SBNY) have also collapsed. While many had blamed the Federal Reserve’s aggressive interest rate hike campaign, others held the view that the SVB failed to manage risk properly.
Lessons For Retail Investors?
The stock’s rise and fall could hold significant lessons for retail investors that all too many have learned the hard way. It’s easy to understand why the stock was attractive to many. Just a few months before the collapse, global brokerages had overweight and buy ratings on the stock. In February 2023, Forbes magazine had ranked Silicon Valley Bank among America’s best banks. However, SVB’s CFO, CMO and even CEO had all reported the sale of their shares over the past month, and the CEO sold 10% of his holdings in the bank just 10 days before the collapse — possible warning signals that could be investigated and information that investors should keep an eye out for.
As such, the collapse of the bank highlighted the need for better and more reliable information sources for retail traders given that one barrier they face is a lack of trust. Traders need to be able to share information and discuss such potential red flags for awareness in real-time.
The collapse of SVB also had a ripple effect on the other U.S. regional banks, with some falling more than 40% in a single day. Timely information thus remains crucial for investors to truly protect their portfolios, especially given that by the time some investors found out about the crash in SVB’s price it had already fallen 60%.
SVB’s case may serve as a warning to retail investors and other financial organizations that the world changes and changes fast. To remain up to speed and competitive in the years ahead, many are looking to stay active and embrace new technologies like Equichat to be in the know of how stocks or investments are performing and be able to identify risks quickly.
The Current Retail Investing Landscape
The number of retail investors continues to grow with a new crop of generation investors also popping up. Reports indicate that over 130 million people used stock trading apps in 2021 alone — a 49% increase from 2020 figures. Stock trading apps generated $22.8 billion in revenue in 2021.
Retail trading hit an all-time high earlier this year, with retail investors making up an unprecedented 23% of total trading volume between January 25 and February 1. The generally agreed-upon vision is that retail investor participation in the markets will continue to grow, and the World Economic Forum (WEF) is calling for more technology and digital platforms to support the secondary market — where investors buy and sell securities from other investors.
In today’s world with its growing retail investor landscape, staying connected in the investing world is often crucial for both retail and institutional investors. By building relationships with a range of players and getting access to the right information, investors can gain insights, build trust, and be better able to navigate market conditions. This could be particularly important for retail investors, who lack the resources and expertise of larger institutional players. However, a lack of trust, education and information present barriers for retail investors.
Amid this landscape, Equichat says it has set out to remove barriers for retail investors and help empower them through its social investing platform that gives an avenue for investors to have serious conversations.
Bridging The Gap Between Stock Market Chat and Trading
Equichat, a new fintech app, is empowering investors by providing a single platform to discover, discuss, and trade stocks in real-time.
This new mobile app, available for download in both the Google Play Store and iOS App Store, provides users with a full suite of social investing tools to share trade ideas, follow other investors, and track their favorite stocks.
Users can securely connect their existing online broker and place verified trades right from the app for other investors to see. Additionally, users have the ability to create custom watchlists, build their own profiles, and follow like-minded investors and co-shareholders.
Equichat’s powerful notification system delivers streaming news as it crosses the wires and alerts users of new trades and important headlines for the stocks they follow.
With the ability to chat across more than 10,000 dedicated stock channels, in-app trading capabilities, and a slew of social investing features, Equichat looks to bridge the gap between real-time chat and trading for investors.
This article was originally published on Benzinga here.
Equichat is a stock messaging app built for the 21st century that allows investors to discover, discuss and trade stocks. Explore over 10,000 dedicated stock channels across all major U.S. stock exchanges. Enjoy real-time discussion, in-app trading, streaming stock quotes and instant news like never before.
FULL LIST OF APP FEATURES:
- Real-Time Discussion: Chat with like minded investors across 10,000+ dedicated stock channels
- Broker Connect: Link up your online broker and trade stocks right from the app; current integrations include ETrade, TDAmeritrade, Robinhood, and Webull- Streaming Newswire: Market moving press releases delivered in real-time as they cross the wires
- Follow Feed: Create a custom Follow Feed to track the activity of other investors and traders
- Custom Watchlist: Build your custom stock Watchlist and share it with other investors- Direct Messaging: Meet fellow shareholders, discuss new ideas and expand your investor network
This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.
John Jewells- Director of Communications