5 Things to Know Before Markets Open

News of the day for March 27, 2023

SVB Private

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First Citizens will buy most of Silicon Valley Bank's assets while regulators are looking to expand lending for First Republic Bank to give it more time to strengthen its balance sheet. Here’s what investors need to know today.

1. First Citizens to Buy Part of SVB

First Citizens Bancshares (FCNCA) will buy most of Silicon Valley Bank following the lender's collapse. First Citizens will acquire all of Silicon Valley’s deposits, loans, and branches for about $72 billion at a discount of $16.5 billion, while some $90 billion of SVB’s securities will remain in receivership with the FDIC.

2. Regulators Look to Expand Emergency Lending for First Republic Bank

U.S. regulators are reportedly considering expanding an emergency lending facility for banks in ways that would give First Republic Bank more time to shore up its balance sheet. Officials have reportedly yet to decide on what support they could provide First Republic, if any, and an expansion of the Fed’s lending facility is just one of several options being considered.

3. Elon Musk's Stock Grants Value Twitter at $20 Billion

Elon Musk offered Twitter employees stock grants that value Twitter at about $20 billion, less than half of the $44 billion price he paid to acquire Twitter last year. In a note to staff, Musk said he sees a “clear but difficult path to a $250 billion valuation.”

4. Activist Investor Elliot Won't Nominate Directors to Salesforce Board

Activist investor Elliott Investment Management won’t be proceeding with plans to nominate its own directors to Salesforce’s board of directors, citing improved performance and a clearer “focus on value creation” from the enterprise software company. In a joint statement, the companies said that in light of Salesforce’s recently announced “profitable growth framework,” alongside its strong fiscal 2023 results and a slew of other initiatives,” Elliott won’t pursue its director nominations.

5. IPOs Down 70% From Last Year, Lowest Since 2019

The turmoil in the U.S. banking sector has had a negative impact on the market for initial public offerings (IPOs). IPOs raised just $19.7 billion this year, down 70% from a year ago, according to Bloomberg data. That is the lowest level since 2019. In the U.S., only $3.2 billion has been raised through IPOs so far this year.

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  1. CNBC. “First Citizens to buy large chunk of failed Silicon Valley Bank.”

  2. Bloomberg. “US Mulls More Support for Banks While Giving First Republic Time.”

  3. New York Times. “Elon Musk Values Twitter at $20 Billion.”

  4. TechCrunch. “Activist investor Elliott ditches director nomination plans for Salesforce.”

  5. Bloomberg. “Global IPO Market Revival Undermined by Banking, Recession Risks.”

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