The host of CNBC’s Mad Money has been often grilled on social media for advising people to invest in assets that turn unprofitable or vice-versa.
His latest example is the notorious Silicon Valley Bank, which became a victim of a bank run, and ultimately collapsed on Friday.
Cramer Said Buy SVB Stock
“This company is a merchant bank with a deposit base that Wall Street has mistakenly been concerned by,” explained Cramer in his show from February 8. He added that the bank was “less dependent upon private equity and venture capital offerings” before adding that the stock “is still cheap” despite being up by 40% YTD at the time.
Fast-forward to a month later, on March 8, SVN’s woes became known to the mass public as the bank announced it had sold a large portion of securities at a loss and plans to dispose of over $2 billion in new shares to fix its balance sheet.
The company’s stocks plummeted shortly after, and the announcement triggered panic among depositors who rushed to withdraw their funds from the bank.
The shares in question, which Cramer touted as cheap a month ago, took another hit on Thursday and were ultimately halted on Friday. Regulators had to step up as the Federal Deposit Insurance Corporation took over the bank during the trading day. The independent federal agency typically awaits the end of the trading hours to do so.
“SVB’s condition deteriorated so quickly that it couldn’t last just five more hours. That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run,” – said Better Markets CEO Dennis M. Kelleher.
The bank’s demise harmed the crypto industry, as it turned out that at least one giant – Circle – holds a substantial amount of its USDC reserves in it. Consequently, the second-largest stablecoin lost its dollar parity, and it saw over $8 billion from its market cap evaporate.
Cramer’s Previous Strikes
Although he has been on the air for many years, Cramer has his fair share of controversial investor advice that has headed in the opposite direction. He has been particularly questionable when it comes down to his views on the cryptocurrency industry.
His previous recommendations have ranged from buying BTC and ETH to selling both assets and staying away from everything crypto. This propelled certain investors to open reverse trades, while others believe the market will head in the opposite direction of what he said.
Nevertheless, some people on Twitter grilled the Mad Money host for causing losses to certain investors.
At first it was funny that Jim Cramer was always wrong.
Now it’s extremely sad how many people and families he’s destroyed by always being wrong.
The guy needs to be taken off the air for good.
— Appatunity (@Appa4two) March 10, 2023
The post Jim Cramer Advised People to Buy Silicon Valley Bank Stock a Month Before its Collapse appeared first on CryptoPotato.
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