Shares of BILL Holdings Inc. were on track for a rebound Monday after the U.S. government announced protections for Silicon Valley Bank depositors and the software company said it expected the bank’s closure to have “minimal impact” on its financial positioning.
Read: Silicon Valley Bank depositors will get ‘all of their money,’ regulators say
The company, which sells software that helps companies automate financial tasks, disclosed Saturday that “the significant majority” of its corporate cash and processed payments was with “numerous large, multinational financial institutions,” though the company had some exposure to Silicon Valley Bank.
BILL’s stock
BILL,
was up about 4% in premarket trading Monday after declining nearly 15% in Friday’s session amid concerns about SVB exposure.
BILL said in a Saturday press release that about $300 million of its $2.6 billion of corporate cash, cash equivalents, and short-term investments was with SVB. The corporate deposits were largely uninsured, according to the release.
The company, which recently changed its corporate name from Bill.com, also noted that about $370 million of its $3.3 billion in cash held in trust on behalf of its customers was with SVB.
“When we received notice of SVB’s closure, we promptly redirected payments to be made through SVB to one of our multinational bank processors,” BILL shared in the release. It “is no longer using Silicon Valley Bank to process payment transactions for our customers.”
Following a weekend release from the Treasury, Federal Reserve, and Federal Deposit Insurance Corporation about protections for SVB depositors, BILL put out a filing with the Securities and Exchange Commission Monday saying that it “expects that it will have access to substantially all of its corporate deposits and cash held in trust on behalf of its customers at SVB.”
Accordingly, BILL “believes that the SVB closure will have minimal impact on the company’s financial position.”
Jefferies analyst Samad Samana wrote in a Sunday note to clients that with “the Fed, FDIC, and Treasury announcing protection for all depositors late Sunday night, we see the risk to our coverage’s balance sheets as reduced.”
He expected “some relief” for BILL shares this week due to “lowered” risk fears, though he added that “a lingering concern we have is whether the weakness in SVB’s customer base (startup heavy) suggests additional softness” for BILL’s fiscal third-quarter total payment volume amid pressure on small- and medium-sized businesses.
