Wedbush analyst David Chiaverini downgraded Silvergate Capital ( NYSE: SI ) to Underperform from Neutral after the crypto-friendly bank on Friday said it's discontinuing its flagship product, the Silvergate Exchange Network (SEN). The network allows U.S. dollar transfers between participating Silvergate ( SI ) account holders round-the-clock and throughout the year. Shares in Silvergate dropped 7.3% in Monday premarket trading to ~$5.35. On Wednesday, March 1, the stock had closed at $13.53. With SEN being "the key attraction for depositors to bring funds to the bank... We believe the discontinuation of the SEN could signal that Silvergate ( SI ) may consider winding down operations," the analyst wrote in a note to clients. Last week Silvergate ( SI ) disclosed it's assessing its ability to continue as a going concern , sending the bank's stock down 58% to an all-time low on Thursday. "We believe a receivership/liquidation scenario is a distinct possibility," Chiaverini said. He calculated the stock's liquidation at $5 per share, factoring a one- to two-year timeframe for the process. Target price gets cut to $4 from $9. In October, the SA Quant system warned that Silvergate ( SI ) stock was at risk of performing badly. The Quant rating is a Strong Sell . By contrast, the average Wall Street rating is Hold as is the average SA Author rating . Last week, SA Author Bram de Haas advised that "it's time to get out" of Silvergate ( SI ).
