The stock market put in a mixed performance on Thursday, with the Dow Jones Industrial Average (DJINDICES: ^DJI) making solid gains while other major market benchmarks lost ground. The performance of a single company helped boost the Dow substantially, while overall, investors seemed uncertain about what the macroeconomic picture will look like in the near future.
Among declining stocks, Tesla (NASDAQ: TSLA) was the most notable company, as its investor presentation late Wednesday left shareholders wanting more. However, a stock related to the cryptocurrency industry took a much harder hit on Thursday, as the company expressed doubts about its future as a going concern. Read on for more about what Tesla said and to find out which stock dealt shareholders a much steeper loss.
Elon Musk draws yawns from Tesla shareholders
Shares of Tesla dropped 7% in early-afternoon trading on Thursday. The move lower came as shareholders seemed disappointed by what they heard — and didn’t hear — at the company’s investor day presentation.
CEO Elon Musk spoke extensively about the potential that the energy transition has, not just for the electric vehicle market but more broadly. A supporting cast of several Tesla executives discussed broader strategic plans for the automaker, including investments in a new manufacturing facility in Mexico and work to become more efficient in its production.
Yet despite the broad-based discussion, Tesla failed to deliver anything particularly momentous in terms of newsworthy announcements. In particular, the automaker didn’t announce a new vehicle or other major product release, and the presentation didn’t include a lot of specific details about how soon to expect progress on key strategic fronts.
Tesla stock moves on perception as much as on fundamentals, and the investor day was an opportunity for the EV pioneer to continue its string of high-profile presentations. Shareholders are now worried that the upward momentum in the auto stock from earlier in 2023 could reverse course.
Silvergate Capital is nervous about its future
The biggest declines of the day came from Silvergate Capital (NYSE: SI). The bank stock was down more than 50% just after midday on Wall Street.
The move lower started just after the closing bell late Wednesday, when Silvergate submitted a filing to the U.S. Securities and Exchange Commission. The filing indicated that Silvergate wouldn’t be able to file its 10-K annual report in a timely manner, citing numerous events that have happened since the company released preliminary figures on Jan. 17.
In particular, Silvergate said that it had sold additional investment securities after the end of last year beyond what it had previously anticipated in order to repay advances from the Federal Home Loan Bank of San Francisco. Those sales will generate further losses that in turn will have a negative impact on capital ratios.
Worst of all, Silvergate said that in light of these problems, it is now looking at whether it will have the ability to continue as a going concern throughout 2023. With the danger of the bank being less than well capitalized according to regulatory guidelines, Silvergate is justifiably reevaluating its business strategies.
Silvergate has been the deposit bank of choice for many cryptocurrency companies, but signs of financial weakness have started to lead some crypto customers to look at moving their banking relationships elsewhere. The resulting loss of confidence could lead to a rush to the exits for Silvergate customers, and that’s why shareholders are more worried than ever.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.