What happened
Shares of Silvergate Capital Corporation (SI), a cryptocurrency bank, were plummeting this morning after the company released worse-than-expected fourth-quarter results.
The company's share price was down by 18.9% as of 11:40 a.m. ET.
So what
Silvergate Capital reported fourth-quarter diluted earnings per share of $0.66, which missed analysts' consensus estimate of $0.72 per share.
Image source: Getty Images.
Despite the earnings miss, Silvergate's CEO Alan Lane was positive about the fourth quarter and full-year 2021 results.
"2021 was another year of significant growth and momentum for Silvergate, driven by strong demand for our digital currency solutions," he said in a press release.
Lane highlighted the fact that Silvergate's full-year 2021 net income more than tripled, compared to the previous year, and total deposits grew to $14.3 billion, a 175% increase year over year. The company also significantly increased the customer-related fee income that it collects by about 175%, compared to the year-ago quarter.
Now what
Investors don't like to see a company miss analysts' estimates for earnings, of course. But what may be adding to the stock's drop today is that Silvergate's share price has already been volatile over the past few months. The company's stock price is down 30% over the past three months.
Any business that's tied to the cryptocurrency market is likely going to experience some big swings with its share price. Silvergate was already seeing that volatility before it released fourth-quarter results and is feeling it even more after it missed Wall Street's earnings estimates.
Long-term investors may want to put today's share-price drop in context, though, and understand that sometimes, companies miss analysts' projections. One disappointing quarter doesn't mean that you should immediately sell your shares.
