Plus, President Biden unveils $6.9T budget proposal.
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The shares of SVB Financial fell more than 60% on Thursday after the tech-focused bank said it plans to raise more than $2B in capital to help offset losses on bond sales. Trading in the stock was halted multiple times during the session for volatility. SVB shares closed at $106.04, down ~60.4% for the day. SVP fell an additional 22% in extended trading on Thursday. More: - CEO Greg Becker, in a letter, said the company has sold most of its available-for-sale securities and is looking to raise $2.25B between common equity and convertible preferred shares.
- The bank said it has already received a commitment of $500M from Investment General Atlantic.
- SVB said the sale of securities would result in a post-tax earnings loss of $1.8B.
- The bank plans to reinvest the proceeds from its sales into shorter-term assets.
- As of Dec. 31, SVB had $28.8B in available-for-sale securities on its balance sheet.
- The company also has $95.3B in held-to-maturity securities.
- SVB pointed to higher interest rates and “elevated cash burn from our clients” as reasons for the capital raise.
- SVP fell an additional 22% in extended trading on Thursday.
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Norfolk Southern CEO Alan Shaw apologized for the Feb. 3 train derailment that spilled toxic chemicals in East Palestine, Ohio. Shaw apologized before the Senate’s Environment and Public Works Committee on Thursday. Shaw said the company would spend whatever it takes to reimburse residents and clean up the town. More: - Shaw said he is determined to make things right, and the company will clean the affected site safely, thoroughly, and with urgency.
- On Feb. 3, a Norfolk Southern cargo train of 150 cars detailed near East Palestine.
- Of the 38 railcars that derailed, 11 were hazardous-materials cars.
- The National Transportation Safety Board (NTSB) has opened an investigation into Norfolk Southern’s safety culture following several accidents involving the company since December 2021.
- Another Norfolk Southern train derailed in Alabama on the same day as Shaw’s testimony. No hazardous material spilled this time.
- Shaw said Norfolk Southern was leading a push to de-emphasize profitability after major railway operators looking to cut costs were employing fewer workers.
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Russian businessmen Mikhail Fridman and Petr Aven have agreed to sell their stake in Russia’s largest private lender Alfa-Bank to avoid western sanctions. Fridman and Aven owned a 45% stake in Alfa-Bank through a Luxembourg-based holding company that controls the bank’s Cyprus-based parent company. More: - According to sources, Fridman and Aven have agreed to sell their stake in Alfa-Bank for Rbs178B ($2.3B) to their longtime business partner Andrei Kosogov.
- Fridman and Aven have been fighting western sanctions imposed on them following Russia’s invasion of Ukraine.
- The men are alleged to have ties with the Russian government.
- The U.S. and the U.K. placed punitive measures on Alfa-Bank in March 2022; the EU introduced its measures last month.
- Fridman and Aven have denied having any ties with the Kremlin.
- Neither of them has received any indication that selling Alfa-Bank will convince the EU to remove the sanctions.
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Visa, Mastercard, Discover, and American Express have decided to suspend a plan to track the sale of firearms in hopes of helping curb gun violence. The decision comes as several bills in state legislatures target the payment giants’ new merchant category code (MCC). The MCC was created to be used when processing transactions for gun and ammunition stores. More: - A Mastercard spokesman said the state bills, if passed, would create inconsistencies in how merchants and others apply the code.
- Visa said it paused its work due to the significant confusion and legal uncertainty the legislative proposals have created.
- Visa and Mastercard had previously said that the new code would not provide enough detail to determine the type of weapon being purchased.
- Many politicians and Second Amendment advocates have criticized the new MCC code, saying it intrudes on constitutional rights and privacy.
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Apple is launching a new music app dedicated to classical music called Apple Music Classical. The app will be available to existing Apple Music subscribers starting March 28 at no additional cost. More: - The standalone app will include over 5 million unique tracks and thousands of exclusive albums at launch.
- The app will offer complete and accurate metadata of many classical pieces, and users can search by composer, work, conductor, or catalog number.
- Apple acquired classical music streamer Primephonic in August 2021.
- Apple Music Classical will require an internet connection for users to stream content.
- An Android version of the app will be coming soon.
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General Motors has kicked off its “Voluntary Separation Program” or VSP for eligible employees. The offer will be available to all U.S. salaried employees who have worked for the automaker for five or more years as of June 30. GM expects to take a pretax charge of up to $1.5B for the program. More: - GM will offer lump-sum payments and other compensation based on years of service to the eligible employees under the program.
- Eligible U.S. employees will receive one month’s pay for every year they worked up to 12 months and receive COBRA health coverage as well.
- Employees interested in the program have until March 24 to sign up.
- Eligible employees who take the voluntary package will leave the company by June 30.
- GM has about 81,000 salaried employees globally.
- GM had previously stated it plans to cut about $2B in annual fixed costs.
- The automaker expects to realize 30% to 50% of the $2B target savings this year and the remainder in 2024.
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- President Biden unveiled a $6.9T budget proposal on Thursday. The proposal would increase funding for a range of government programs, extending the solvency of Medicare, lowering prescription drug prices, and cutting the deficit by $3T over the next decade.
- Senate Minority Leader Mitch McConnell has been hospitalized after he fell at a hotel in Washington, D.C., during a private dinner.
- The four largest banks in the U.S. lost about $52B in market value on Thursday. JPMorgan lost $22B, Bank of America lost $16B, Wells Fargo lost $10B, and Citigroup lost $4B.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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