After reporting that Meta Platforms’ (NASDAQ: FB) ambitious stablecoin project Diem is winding down, a WSJ report stated that the failing project has a suitable buyer in Silvergate Capital Corp. (SI). Meta is selling the Diem technology to Silvergate Capital for $200 million.
Shares of FB spiked more than 6% during the extended trading session yesterday. Meanwhile, SI shares also rose almost 3% during the extended trading session, following the news.
Silvergate Capital- Diem’s Suitable Buyer
The Diem Association was founded in 2019 (formerly Libra) to issue a more convenient and stable digital currency, which was labeled diem coins. However, regulatory overhauls and tons of backlash compelled CEO Mark Zuckerberg to sell his ambitious project. The step is aimed at returning money to its investors.
Diem has found a suitable buyer in one of the best crypto stocks. Silvergate Capital is a small California bank, which serves blockchain companies. Last year, The Diem Association had proposed to make Silvergate its official issuer of the stablecoins, but due to resistance from the U.S. Federal Reserve, had to call off the deal.
After several failed attempts at launching the digital currency, Silvergate Capital is finally buying the technology for $200 million. How and where the bank will use the technology will be seen shortly once it discloses further details.
Wall Street’s View
Yesterday, Guggenheim Securities analyst Michael Morris lowered the price target on the stock to $365 (23.9% upside potential) from $395, while maintaining a Buy rating.
The Wall Street community has awarded the FB stock a Strong Buy consensus rating based on 13 Buys and 1 Hold. The average Meta Platforms price target of $405.36 implies 37.6% upside potential to current levels. Shares have gained 11.2% upside potential to current levels.
Blogger Opinions
TipRanks data shows that financial blogger opinions are 96% Bullish on FB, compared to the top social media stocks’ sector average of 69%.
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