The host of CNBC's Mad Money is regularly grilled on social media for advising people to invest in unprofitable assets and vice versa. His latest example is the notorious Silicon Valley Bank, which fell victim to a bank run and ultimately collapsed on Friday.
"The company is a commercial bank with a deposit base that has been wrongly focused on by Wall Street," Cramer explained on the Feb. 8 show, adding that the bank "relies less on private equity and venture capital products." ,” before adding that the stock “is still cheap” despite a 40% year-to-date gain.
Fast-forward a month later, on March 8, and SVN's plight became public knowledge, as the bank announced that it had sold most of its securities at a loss and planned to sell more than $2 billion in new shares to repair its balance sheets. The company's stock plummeted shortly after, and the news sparked panic among depositors, who withdrew their funds from their banks.
The stocks, touted by Cramer as cheap a month ago, took another hit on Thursday and ended trading on Friday. With the FDIC taking over banks on trading day, regulators have had to step up. Independent federal agencies typically wait to do so after trading hours close. "The situation at SVB deteriorated so quickly that it couldn't last another five hours. This was because its depositors were withdrawing money so quickly that the bank became insolvent and because of a typical bank run, the market A shutdown is inevitable," said Dennis M. Kelleher, CEO of Better Markets.
The bank’s collapse hurt the crypto industry, as it turns out that at least one giant Circle holds large USDC reserves. As a result, the second-largest stablecoin lost dollar parity and lost more than $8 billion in market cap. Although Cramer has been on the air for years, he also has his fair share of controversial investor advice that goes in the opposite direction. He was especially questioned when it came to his views on the cryptocurrency industry.
His previous advice ranged from buying BTC and ETH to selling both assets and staying away from all cryptocurrencies. This prompted some investors to trade in the opposite direction, while others believed the market would move in the opposite direction from what he said.
Still, some took to Twitter to slam the insanely money-making host for causing losses to some investors.
