Jason Calacanis, a well-known venture capitalist and host of the Comprehensive Technology PodcastHe caused a stir on Twitter over the weekend with a series of panicked tweets about the collapse of Silicon Valley Bank (SVB).
With nearly 700,000 followers on the social media platform, Calacanis expressed his fears about the situation, warning his audience to be ‘ABSOTELY TERRIFIED RIGHT NOW’ and predicting that it could ‘SPIRAL INTO CHAOS’.
Following the announcement over the weekend that the federal government had pledged to insure the assets of all depositors at the now-defunct bank, Calacanis once again took to Twitter to boast about how he had managed to “raise the fire alarm” to warn others.
He blasted his critics for being “ungrateful,” but not before continuing to fan the flames of panic throughout the weekend.
Jason Calacanis, a well-known venture capitalist and host of a popular tech podcast caused a stir on Twitter by expressing concern over the collapse of SVB.
Calacanis posted a series of panicked tweets, all written in all caps.
Some of the tweets that were predictions began to border on hysteria.
Calacanis painted a picture of panic if the government didn’t intervene… which it did
Calacanis appeared to be tweeting in all caps and was one of the loudest voices pushing for the Biden administration to throw a lifeline at SVB before urging the President and Treasury Secretary Janet Yellen ‘MUST GO ON TV TOMORROW AND GUARANTEE ALL DEPOSITS UP TO $10M.’
Calacanis is known for being one of the most influential voices in Silicon Valley, along with his co-hosts on the All-In podcast, including self-described “populist” businessman David Sacks.
The trio often tout their connections to industry heavyweights like Elon Musk and German-American billionaire businessman Peter Thiel.
But Calacanis and Sacks drew criticism for their role essentially in spreading panic over the bank run at SVB and their enthusiastic support for the Biden administration’s intervention to save the bank.
Calacanis was also criticized by other Twitter users with one saying ‘your tweets aren’t helping’ while another asking ‘why are you doing this?’
Some journalists and tech experts have described the behavior of Calacanis and Sacks as irresponsible and obnoxious, with one commentator comparing them to “tech brethren” who were more interested in self-promotion than constructive engagement.
“Taking an unearned spin on irresponsible screaming panics and all-caps pants sex is a novel approach,” wrote tech journalist Kara Swisher.
“I doubt anyone with real power in DC has paid attention to a bit of Ozymandias, King of Kings: look at my works, mighty one, and despair: nonsense from some tech brothers.”
UC Davis professor Martin Kenney was quoted as saying he would “keep (his) mouth shut and count (his) blessings that (he) was bailed out by the taxpayers.”
Following the government’s pledge to insure depositors’ assets, Calacanis took credit for sounding the alarm, later saying his warnings were not appreciated by his critics.
People wait outside the Silicon Valley Bank headquarters in Santa Clara, California, on Monday to withdraw funds after the federal government intervened in the bank’s collapse.
Customers could be seen waiting outside SVB branches on Monday, here in Santa Clara
The Biden administration assured taxpayers this weekend that those funds would not be used to bail out the bank.
The issues at SVB had been in the works for months. As the Federal Reserve raised interest rates, it put pressure on many of the bank’s top clients, including venture capital and technology firms, who began withdrawing their deposits.
SVB executives made the decision to lock up many, further exacerbating the bank’s problems.
“They were so eager to make a profit,” venture capitalist Chamath Palihapitiya said on the All-In podcast. “Somewhere along the way, the SVB risk people made a huge miscalculation. They basically went and bought 10-year risk to pay back money that could be paid on a daily or weekly basis.’
After SVB sold its long-term investments, it became clear that the bank had incurred a huge loss of almost $2 billion. This revelation sparked widespread panic, with several influential members of the startup community advising their portfolio companies to divest their assets.
Throughout the weekend Calacanis continued to sow concern through his tweets
Calacanis was called out by other Twitter users with one saying ‘your tweets aren’t helping’
Even after the government intervened, Calacanis continued to post how the situation was “about to get out of hand.”
Following the government intervention, Calacanis sought compliments, declaring himself someone who gave warnings and ‘pulled the fire alarm’
According The Wall Street JournalThe frenzy started on Silicon Valley’s private Slack channels Thursday morning, but quickly spread to social media platforms as startup founders began withdrawing their funds.
Before long, a full-blown bank run ensued, with depositors requesting a whopping $42 billion from the bank in a single day.
“They made the right business decision: If the theater is on fire and you panic first, that’s the best business decision for you,” said UC Davis professor Martin Kenney. the daily beast. ‘For society, panic is catastrophic.’
“And that’s more or less what happened,” he added. “A bunch of them panicked and headed for the exits, some of them yelling fire after they got out the door.”
As customers left, nearly $10 billion of the bank’s market value was wiped out before the government took it under control.