What's Going On With ZoomInfo Technologies Stock?

ZoomInfo Technologies Inc ZI shares are volatile Monday morning after the company revealed that it has exposure to SVB Financial Group SIVB.

What Happened: In a regulatory filing, ZoomInfo noted that it has approximately $20 million of cash and equivalents in deposit accounts with SVB, representing about 3% of the company's total cash position. The company also has approximately $264 million in money market securities for which SVB acts as custodian, representing about 42% of its total cash position. 

Furthermore, ZoomInfo had accounts with SVB totaling approximately $6 million pursuant to letters of credit that the company was required to provide its landlord in connection with the execution of leases for office space.

"Regardless of access to those deposits and money market securities, at this time, the Company has sufficient liquidity and alternative banking relationships to meet its obligations," the company said in the filing.

Check This Out: Did The Simpsons Predict The Collapse Of Silicon Valley Bank? 'What Do You Mean The Bank Is Out Of Money?'

What To Know About SVB: SVB Financial, the parent company of Silicon Valley Bank, collapsed in a matter of days as a result of liquidity issues. The bank counts many startups and smaller tech companies as clients. Deposits from these clients soared during the pandemic as many of them grew their cash positions. SVB decided to buy U.S. Treasurys and government-backed mortgage securities with the influx of cash. 

Amid the current rising-rates environment, inflows turned to outflows and SVB was forced to sell some of its longer-term treasurys at a loss to cover the withdrawal requests, but even that wasn't enough. When SVB went to raise additional capital last week, the stock tanked, which put more pressure on the bank. The following day several customers rushed to withdraw capital and ultimately the bank's cash position ran dry.

Several companies with exposure to the bank have come under significant selling pressure in the wake of the SVB collapse.

See Also: EXCLUSIVE: Fed Steps In To Save Depositors Following SVB Failure; Is The Time To Buy Shares Of Regional Banks?

ZI Price Action: ZoomInfo has a 52-week high of $61.44 and a 52-week low of $21.71.

The stock was down 3.07% at $21.16 at time of publication, according to Benzinga Pro.

Photo: Lorenzo Cafaro from Pixabay.