Silvergate Capital Corp.
stock shed an additional 8.5% in premarket trades on Friday, on top of a nearly 43% loss on Thursday after a warning from the company on its drop in deposits and a 40% headcount reduction. J.P.Morgan analysts downgraded Silvergate Capital to neutral from overweight and cut their price target on the stock to $14 from $33. Analysts noted that the company’s $4.7 billion reduction in average deposits from digital asset customers was “well above even the high-end of the range” under various stress scenarios. “While one could argue that the shares remain cheap on the surface, given the wildcards associated with the medium- as well as long-term impacts to the business, we see upside potential being fairly limited until the earnings power of the franchise is better understood,” J.P.Morgan analysts said Friday.