It may go down in the history books of Silicon Valley: the time when the most prominent bank, one founded nearly 40 years earlier, injured itself so badly it had to be bailed out by another bank or it was in danger of bursting into flames to go up in one day.

We don’t yet know who that “white knight” will be, but rest assured that there are a lot of conversations going on right now about who will step in and take over Silicon Valley Bank, an institution whose shares have about doubled by more than 80% are down in after hours trading from where they were at the start of yesterday. And why? Not because the bank is bursting at the seams. Instead, because it completely messed up some important messages at the worst possible time.

This, my friends, is what is called an own goal.

If you’re just catching up, here’s what happened: Silicon Valley Bank lost $1.8 billion in sales of U.S. Treasury bonds and mortgage-backed securities it had invested in, due to rising interest rates. The bank is also struggling with shrinking customer deposits, as its customer base of largely startups currently has much less money to park at a financial institution.

Being on this spot, it decided to raise a ton of money to secure its business. The plan was to sell $1.25 billion of common stock to investors, $500 million of convertible preferred stock and $500 million of common stock in a separate transaction to private equity firm General Atlantic. The apparent purpose was to project that the bank was conservative and was raising this money to stabilize itself.

Oh, though, how it failed, and who can be surprised since it released its announcement about these plans just as crypto bank Silvergate announced it was winding down its operations.

You might imagine that someone at Silicon Valley Bank would have paused to think, “Hmm, maybe today isn’t the right time to declare that we’re strengthening our balance sheet.” Apparently they didn’t. Instead at the end of the market, they close one yesterday complicated press release that was so poorly received it was almost comical. Except that Silicon Valley Bank is a trusted financial partner to many startups and venture companies that are now nervously struggling to figure out what to do.

It certainly isn’t funny to Silicon Valley Bank’s estimated 6,500 employees or to CEO Greg Becker, who had to make a Zoom call late this morning to reassure panicked customers that it was just a small press release!

It was not a comforting performance. “My question is just to stay calm because that’s what’s important,” Becker told an untold number of viewers who weren’t given a chance to ask questions. Silicon Valley Bank has been a longtime supporter of you venture capital community firms, so panic is the last thing we need from you,” he added, saying what no one ever wants to hear from the head of their sofa.

One of those customers, who declined to be named, told us afterwards: “It’s like the end of ‘Animal House’. Do not panic? Now I panic when I watch your broadcast.

What happens from here is open to question, and something needs to happen soon given how quickly the bank’s stock is falling. We’ve reached out to General Atlantic to see if it still plans to invest $500 million in Silicon Valley Bank common stock (we’ve yet to hear anything).

We reached out to Silicon Valley Bank itself, which repeated Becker’s previous talking points. Silicon Valley Bank was only trying/attempted to “strengthen its financial position”. It is “well capitalized”, has a “high quality, liquid balance sheet”, boasts “compliant capital ratios”, etc, etc.

Again, we’re betting that a bank like Goldman Sachs will come to the table, score the deal of a lifetime, and keep Silicon Valley Bank employees from running for the exits. We’ll know soon enough.

Meanwhile, those who work in investor relations may want to look for a new job.

Perhaps the same goes for Becker, who should have done more to diversify the bank’s business – this is a problem that has been hiding in plain sight for years – and who has just given traders and hedge funds a fresh new way to trade in the current market downturn. the startup economy. (Becker sold one huge chunk of its own shares back in January.)

His only hope now is to convince the bank’s remaining customers that everything is fine and hope they will buy it.

That window closes quickly. Founders Fund and other firms reportedly advised their portfolio companies to do so earlier today withdraw their money. Even VCs show support for the bank must have done the same privately lest their portfolio companies risk losing their precious capital.

“We have enough liquidity to support our customers, with one exception,” Becker said earlier during that Zoom call. “If everyone starts saying to each other that SVB is in trouble, that will be a challenge.”