Jim Cramer Praised Doomed Silicon Valley Bank Just Last Month: ‘Stock’s Still Cheap’

Jim Cramer lauded the now-insolvent Silicon Valley Bank just one month before its spectacular collapse this week. The CNBC commentator told viewers that the bank’s stock price was “cheap” and ripe for a rebound this year after getting hammered in 2022.

SVB, as it is commonly known, indicated this week it was experiencing cashflow problems, prompting the bank to try to raise money. That effort fell short and the bank went belly-up in what is the second-largest bank failure in U.S. history. On Friday, California officials shut down the institution and placed it under the control of the Federal Deposit Insurance Corporation.

During the Feb. 8, 2023 episode of Mad Money, Cramer offered a rosy forecast for SVB.

“The ninth best performer year-to-date is SVB Financial,” Cramer said of the bank. “This company’s a merchant bank with a deposit base that Wall Street had been mistakenly concerned about.”

Cramer said one of the appealing aspects of the company is that the bank has “become less depending upon private equity and venture capital offerings.”

He noted the stock was the fourth-worst performer in 2022, but said it had been oversold.

“I think the fears were not justified and it’s a very compelling situation,” he continued. “By the way, long-term private equity and venture capital, they’re not going away. Being a banker to these immense pools of capital has always been a very good business. Stock’s still cheap.”

Cramer predicted the bank’s stock would run higher.

“I think it’s also a good example of why these bounce-back moves might be far from over,” he added. “These stocks need more room to run, especially if you think they were driven down to artificial levels by tax loss selling, artificial dumping like we saw in Warner Bros. Discovery or Tesla.”

He concluded, “It’s just that the declines got a little too excessive when nothing really bad happened, at least by the end of last year.”

Watch above via CNBC.