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No. of Recommendations: 2
benefit from Robinhood's bad PR moves around GME. Fintech stocks in general have done well, SoFi has a loyal following, have multiple levers in play for revenue growth, are backed by the well-known venture capitalist (Palihapitiya), and has a very member-focused strategy: https://www.sofi.com/how-it-works/

Initial PR for the SPAC:

https://www.businesswire.com/news/home/20210107005746/en/SoF...

"SoFi delivered over $200 million in total net revenue in the third quarter of 2020 and is on track to generate approximately $1 billion of estimated adjusted net revenue in 2021, representing year-over-year growth of approximately 60 percent, and full-year adjusted EBITDA profitability."



https://www.sofi.com/press/sofi-announces-agreement-acquire-...

This is SoFi furthering their plan for a national bank charter, per recent PR:

"The proposed acquisition is a key strategic step in SoFi’s path to obtaining a national bank charter. As a result of the proposed acquisition, SoFi will switch its current de novo bank application to a change of control application. If successfully granted a national bank charter by the OCC and Federal Reserve pursuant to its change of control application, SoFi plans to contribute $750 million in capital and pursue its national, digital business plan while maintaining GPB’s community bank business and footprint, including GPB’s current three physical branches"

https://www.fool.com/investing/2021/01/20/sofi-is-going-publ...

"SoFi is popular. It's been around for a little while, and it's interesting to see how these businesses evolved because it really started out as an alumni funded lending model that ultimately it was just helping students and graduates deal with student loans. It was something that was helping students deal with, student debt and it really has grown to be a full-fledged banking style operation here. I saw that with SoFi unlike Upstart (NASDAQ: UPST), here SoFi, has actually gotten conditional approval for its National Bank charter application."

"SoFi does have a big mortgage operation. We mentioned personal loans, the student loans, they just launched their credit card product on the lending side, they also have a high-yield savings platform, they have an investing platform where you can buy and sell stocks similar to a Robinhood, I would call it, but honestly doing a better job of educating the consumer and really bringing the community into the investing process, not just trading. They have a robo-advisor, there's an insurance division that partners with other insurance companies to offer products to their members. They have 1.8 million members. I mentioned that Upstart has done a little over 600,000 loans in its history, SoFi is 1.8 million members and all of these other products. A banking charter really makes sense for them."

https://seekingalpha.com/article/4406011-sofi-growing-fintec...

"SoFi has been structured around three operating segments; (1) Lending; (2) Technology platform; and (3) Financial Services. Its lending arm constituted 83% of estimated 2021 fiscal year revenue. This deals with personal, home, and private student loans."

"This cross-selling of multiple financial products forms a major tenet for SoFi's bull case as it helps to boost revenue while minimising churn. This has been most highlighted in the 220% growth of their multi-product members from 125,000 as at the end of Q4 2019 to 400,000 as at the end of Q4 2020. The company estimates this will rise to 775,000 as at the end of the 2021 fiscal year, a 95% year-over-year increase."

"SoFi is on track to exceed 3 million members for 2021. This would be a year-over-year increase of 75%, a full 100 basis points more than the 74% increase of its FY 2020 over FY 2019."

"The accelerating growth in members runs contrary to the law of large numbers and points to growing momentum with their business model. Further, SoFi's investing app experienced a surge in downloads with the recent Robinhood debacle around blocked GameStop trades."

"SoFi's current price of $23.70 and 865 million shares outstanding place its revenue multiple at 22x using estimates for $980 million in revenue for its 2021 FY. As previously stated, I think SoFi is well placed to beat this revenue guidance. This should see the revenue multiple for its 2022 FY drop beyond the current 14x ascertained using the $1.5 billion forecast for the same year. The company's preliminary approval for a U.S. bank charter will also help meet the forecast for EBITDA profitability in 2021 by lowering their cost of capital and enabling increased net interest margin from holding loans longer."

https://www.fool.com/premium/coverage/investing/2021/02/11/t...

Just mentions SoFi could benefit from exodus from Robinhood.


https://seekingalpha.com/article/4400594-social-capital-hedo...

https://www.cnbc.com/2021/03/09/sofi-ceo-anthony-noto-on-hig...

Noto said SoFi — which started in 2011 with a focus on student loan refinancing — has advantages as a fintech company that would allow it to offer “one of the highest interest rates in the marketplace.”

“When we have a bank charter, we’ll be able to determine what interest rate that we want to provide and not be dependent on anyone else,” said Noto, a former partner at Goldman Sachs and formerly chief operating officer at Twitter. “We have the capital and the financial model because we’re a digital company to provide a much more attractive interest rate on SoFi Money than we are providing today.”

https://www.forbes.com/sites/petercohan/2021/01/08/3-reasons...

Palihapitiya told CNBC that he “systematically tried to future out what was broken in banking” and concluded that “SoFi was the top of the list when I looked across all the companies” that could deliver the solution that potential customers wanted.

Anthony Noto Is a Solid Public Company CEO
When he joined SoFi as CEO, I thought Noto would be able to preserve what was good about the company and fix what ailed it. His executive role at Twitter and former position as a Goldman Sachs GS -1.1% managing director also boded well.

He was also former CFO of the National Football League and he has since cut a 20 year deal to call the Los Angeles football compound “SoFi Stadium” — which I hope pays off.

He has fixed SoFi’s culture, closed an acquisition to broaden its product lines and has made progress on getting a bank charter.

In November 2019, he described SoFi as a two year old company — since he said that he had set out to reinvent its culture. In a nutshell, Noto did this through “leadership alignment and accountability” for acting according to SoFi’s 11 core values, he told TheLadders.

Dreamer
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