3. SoFi Technologies, Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 25
SoFi Technologies, Inc. (NASDAQ:SOFI) provides digital financial services. It operates through three segments: Lending, Technology Platform, and Financial Services. In January 2021, Chamath Palihapitiya revealed that his SPAC would take SoFi Tech public in a deal valuing the firm at more than $8 billion. As of December 26, the firm has a market capitalization of $3.6 billion. SoFi was founded in 2011 with a focus on student loan refinancing for millennials, but has evolved since then, now offering stock and cryptocurrency trading, personal and mortgage loans, and wealth management services.
On December 15, Piper Sandler analyst Kevin Barker maintained an Overweight rating on SoFi Technologies, Inc. (NASDAQ:SOFI) and lowered the price target to $7.50 from $8.50, noting that due to the market’s rising prices, consumer lenders have been under pressure throughout the majority of 2022.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Silver Lake Partners is a leading shareholder in SoFi Technologies, Inc. (NASDAQ:SOFI) with 31.2 million shares worth more than $152 million.
In its Q4 2021 investor letter, Altron Capital Management, an asset management firm, highlighted a few stocks and SoFi Technologies, Inc. (NASDAQ:SOFI) was one of them. Here is what the fund said:
“We have been building our position in SoFi Technologies, Inc. (NASDAQ:SOFI) over the last two quarters but have not yet written about our thesis until now. SoFi is an online financial technology company that started off refinancing student loans. This segment remains a big part of the company’s business, but they have more recently expanded their products to offer an entire suite of financial services including personal banking, investing, and credit. While their collection of products is still evolving and not yet complete, we believe the company is in the early stages of its inflection. The company nearly doubled its member count over the past year and is growing 50%+ despite its loan refinancing business taking a hit due to the COVID-related loan moratorium. Furthermore, the company is close to obtaining a bank charter through its acquisition of Golden Pacific Bancorp, a community bank based in Sacramento. A bank charter would allow SoFi to take in its customer deposits, lowering its cost of capital and expanding the company’s breadth of financial offerings.
While SoFi is not the only online banking platform out there, we believe it could take a decent share of the financial services market. Banking is a notoriously sticky business, as the inconvenience and hassle of switching banks prevent consumers from jumping to competitors regardless of cost. This is one of the reasons that traditional banks are one of the few businesses to have truly been disrupted by technology. We think SoFi is well on its way to changing that and creating a new paradigm for the future of consumer banking and financial services. (read more)
