Sequoia Capital lowers its FTX holdings to $0, following the ( liquidity crisis )
Sequoia Capital lowers its FTX holdings to $0, following the ( liquidity crisis )
Sequoia said the platform is writing the full value of its investment in FTX.
Sequoia Capital invested nearly $214 million in the FTX platform last year.
Sequoia Capital, the US-based venture capital firm, has reduced its FTX investment to zero dollars. In a recent letter to investors, Sequoia Capital revealed that the platform writes the total value of its holdings in the FTX exchange. The venture capital platform clarified its latest decision citing FTX's "liquidity crunch" and "solvency risk" as factors.
Sequoia said:
We are in the business of taking risks. Some investments will surprise on the upside and others on the downside.
Last year, Sequoia Capital invested approximately $214 million in FTX's international and US operations.
A sudden loss for FTX
Financial platform Sequoia Capital revealed that the company invested $150 million in FTX.com and FTX.us through its Global Growth III fund. It has also invested $63.5 million in the stock market and its US division through its SCGE fund. These holdings represent 3% of the Global Growth III fund and less than 1% of the SCGE fund.
The venture capitalist added:
The $150 million loss is offset by about $7.5 billion of realized and unrealized gains in the same fund, so the fund remains in good shape.
The company also said it conducted "rigorous due diligence" throughout its investment in FTX. Additionally, the exchange generated approximately $1 billion in revenue and over $250 million in operating income in 2021.
The platform promised its investors that the company will continue to conduct significant research and "extensive due diligence" going forward.
