Silvergate Capital (SI), mcap=$700m, price $21.95 vs $30.00

$SI pitch:
– FDIC-regulated bank which specializes in serving the crypto-currency ecosystem and acquired the Diem platform from $META.
– An institution with a very liquid asset book of government securities trading below tangible book.
– No credit risk exposure to crypto.
– Silvergate is down from $220 to $30 over the past year.
– At 1xBV downside is very well protected with material optionality from crypto recovery or Diem getting regulatory approval.

$SI valuation:
– Trades at 1xBV.
– In an upside scenario, it is a differentiated financial institution worth several multiples of BV.
– If Diem takes off $SI becomes a high-growth technology company.

Exp. gain: 2x-4x.

Full write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/Silvergate_Capital/6761860521

Leave a Comment