/Roblox Is Getting $150 Million From The Government After The Bank Collapsed, The Money Isn’t Real

Roblox Is Getting $150 Million From The Government After The Bank Collapsed, The Money Isn’t Real

A classic bank run made Silicon Valley Bank the second largest banking collapse in history. Now the Federal Reserve is promising a bailout for all of its clients, which includes everyone from small start-ups to major players in the tech industry. Roblox, the social media platform where millions of kids play daddy versions of blockbuster video games, is one of them.

The Silicon Valley bank had approximately $209 billion in assets on its balance sheet last week when panicked venture capitalists tried to withdraw their money en masse after concerns the company had become insolvent. About $150 million of that belonged to Roblox, something the company revealed in an SEC filing late Friday after SVB was shut down by the Federal Deposit Insurance Corporation.

“Of the $3 billion cash and securities balance of Roblox Corporation (the “Company”) as of February 28, 2023, approximately 5% is held at Silicon Valley Bank.” wrote. “Therefore, regardless of the final outcome and timing, this situation will have no impact on the Company’s day-to-day operations.”

At the time, it seemed that everyone who gave SVB their money would never see it again. Typically, bank deposits are only insured up to $250,000. However, on Sunday, the Federal Reserve and FDIC invoked a systemic risk exception. to rescue the approximately $175.4 billion in customer deposits. $150 million may have been the couch-cushion switch to Roblox, which made $2.2 billion last year from its collaborative metaverse (which reportedly includes children’s work).

Treasury Secretary Janey Yellen and others insisted it was not a rescue because SVB executives and investors were still at zero, but it’s not that simple. even apart from make risky bets on certain long-term securities and lobbying Washington for less regulationSVB, as its name suggests, held a unique position in the world of technology.

He “vibration bank and talks” was a venture capital and cryptocurrency-friendly revolving door, and also required startups it helped get loans to use it exclusively for their banking needs. Fast forward to the weekend when people started appearing online out of nowhere to beg for ransom, even though in some cases they were responsible for creating the bank run in the first place, and were even trying to benefit from it in the meantime.

All of which is to say that SVB was so far from It’s a wonderful life‘s Savings and Loan you could get. And in the act of bailing it out, the Federal Reserve has now committed to lending as well to any other banks that are experiencing short-term investment losses following recent interest rate hikes. In simple language, what this means is a preemptive promise to bail out other banks that could have fucked up. It’s all in the name of propping up the financial system, even when things like increased credit card debt and student loan forgiveness seats on the Supreme Court.

At least Roblox will get his money.