These 2 Stocks Are Feeling the Heat After Hours Wednesday

The stock market proved to be quite resilient on Wednesday, bouncing back from some declines in mid-afternoon trading to finish well above its lows. The Dow Jones Industrial Average (^DJI 0.69%) wasn't quite able to get back to even for the day, but the S&P 500 (^GSPC 1.20%) and Nasdaq Composite (^IXIC 1.59%) enjoyed modest gains.

Data source: Yahoo! Finance.

Even with some positive momentum heading into the close, a pair of companies saw their share prices move sharply lower in after-hours trading. MongoDB (MDB 7.69%) reported financial results that didn't live up to high expectations from the cloud stock's shareholders, while Silvergate Capital (SI 2.50%) announced what could be the final chapter in a saga that has seen its share price plunge more than 97% from its best levels of the past year.

MongoDB has investors worried about a slowdown

Shares of MongoDB dropped 9% in after-hours trading late Wednesday afternoon. The cloud-database specialist reported solid growth for the fourth quarter of its 2023 fiscal year, but its guidance for the near future didn't inspire the confidence that shareholders had wanted.

MongoDB's financial results were good. Revenue of $361 million was up 36% year over year, and gross margin climbed three to four percentage points from where it was the same time last year. Adjusted net income jumped to $46.4 million, working out to earnings of $0.57 per share, up from just $0.10 per share in the same quarter a year ago. Free-cash-flow levels were also significantly higher from the prior-year period.

However, investors seemed disappointed with MongoDB's guidance. The database provider sees full-year fiscal 2024 revenue coming in between $1.48 billion and $1.51 billion. That would represent growth of just 15% to 18% over fiscal 2023's final figures, a big slowdown from the 47% increase in sales between the 2022 and 2023 fiscal years. Similarly, adjusted earnings of $0.96 to $1.10 per share wouldn't be all that much higher than the $0.81 per share that MongoDB earned over the past year.

CEO Dev Ittycheria was optimistic about MongoDB's long-term prospects. However, the possibility of having to wait until economic conditions normalize seemed to raise alarm bells among some shareholders, which perhaps motivated the steep decline in the share price.

Silvergate looks to liquidate its bank

Meanwhile, shares of Silvergate Capital were down 33% in after-hours trading, continuing the stock's recent descent. The crypto-linked bank-holding company announced a dramatic move to exit its primary business.

Silvergate said that it would wind down operations at its Silvergate Bank subsidiary and voluntarily liquidate the entity, following procedures set forth by bank regulators. Under the plan, all deposits will be repaid, and Silvergate will have to consider the best way to resolve outstanding claims while preserving the value of its remaining assets.

The move comes just days after the bank started evaluating its ability to remain a going concern following the withdrawal of a huge portion of its deposits from crypto-industry depositors. Silvergate was a counterparty to bankrupt crypto exchange FTX, and nervousness throughout the industry in the aftermath of the FTX scandal led to a loss of confidence in the Silvergate Exchange Network.

With Silvergate having delayed the filing of its annual financial report, it's unclear whether shareholders will recover anything once the liquidation of the banking subsidiary is complete. With the stock now down more than 98% from its highs in late 2021, though, investors certainly can't expect to get even a fraction of what some have lost.