Shark Tank's Kevin O'Leary advises startup CEOs to limit bank deposits
Per Business Insider
Shark Tank investor Kevin O'Leary has advised his CEOs regarding limiting bank deposits. This comes in the wake of Silicon Valley Bank's collapse, and the glooming outlook on the banking system as more regional banks have taken a hit.
O'Leary warned that startups should prepare themselves for other banks possibly collapsing. He gave a statement saying to the CEOs that they shouldn't put over 20% of their liquid assets in a single institution.
The Shark Tank investor said they should do this no matter how big people think the banks are. He said there was always risk in big and small banks, referring to a potential "black swan idiot" within the company, per Yahoo Finance.
O'Leary: "We've told our CEOs: do not put any more than 20% of liquid assets in any one institution. I don't care who you know or how big they are, there's always the next black swan idiot manager in big and small banks. So we don't know who they are,"
The comments came shortly after Silicon Valley Bank's failure last Friday. O'Leary reportedly focused on management and an "incompetent board" instead of focusing on talking about the problems being systemic.
Previously, Kevin O'Leary swore that he would no longer be buying bank stock again, saying Biden "has essentially nationalized the industry." He also noted that there was "no such thing as a free lunch" and that banking should be considered highly regulated utilities.
While others were affected, big banks like Bank of America have benefited from the collapse of Silicon Valley Bank. BofA reportedly received over $15 billion in new deposits as SVB tanked, and more deposits were flowing into larger banking institutions, including JPMorgan Chase & Co., Citigroup Inc., and Wells Frago & Co.
See flow at unusualwhales.com/flow.
Other News:
- Kevin O'Leary has said he will never buy a bank stock again as Biden "has essentially nationalized the industry"
- Bank of America benefited from Silicon Valley Bank's collapse as it received over $15 billion in new deposits
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