Sunrun Down Over 10% On Silicon Valley Bank Exposure: What Other Companies Are Exposed?

Shares of Sunrun Inc RUN, the largest residential solar developer in the U.S, fell by as much as 15% on Friday as a result of the news that Silicon Valley Bank has been closed by the California Department of Financial Protection and Innovation.

The bank, a lender to clean energy firms like Sunrun, has now been taken over by the Federal Deposit Insurance Corp. (FDIC). This comes after its parent company, SVB Financial Group SIVB, failed to raise enough cash to sustain operations.

The development could have a significant impact on Sunrun, GLJ Research said in a statement. For starters, Sunrun lost two major lenders within a span of just 90 days.

Credit Suisse Group CS and Silicon Valley Bank have both withdrawn their support, leaving Sunrun in a precarious financial situation.

Sunrun's loans from Silicon Valley Bank are now owned by the FDIC, which will likely sell them at a discount, leading to negative marks.

Analysts also remain skeptical of Sunrun's business model, GLJ's Gordon Johnson maintains a Sell rating and a year-end 2023 price target of $12.74 per share.

Other companies that have exposure to Silicon Valley Bank include various Chinese startups, according to CNBC. However, some tech start-ups have confirmed that they have no exposure to the bank.

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Non-fungible token-based online video game Axie Infinity and blockchain platform Immutable X are among those that have said they do not have any exposure.

Meanwhile, workplace management platform Rippling has historically relied on SVB for payments rails for its payroll and other products. However, in light of the bank’s closure, Rippling has immediately accelerated its planned switch to JPMorgan Chase & Co JPM.

CEO Parker Conrad said that the company's top priority is to get its customers and employees paid as soon as possible, and they are working diligently toward that on all available channels.

Biotech company Chimerix Inc CMRX said its exposure to Silicon Valley Bank is immaterial, as the cash it has in the bank is near the FDIC insured limit.

While some companies have managed to avoid exposure to the bank, others may be left scrambling to find alternative sources of funding and support.

Price action: Shares of Sunrun are down 13.75% to $20.07, while shares of Chimerix are down 2.98%, according to Benzinga Pro.

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