Shareholders To Vote On SPAC Merger With SoFi As Public Offering Awaits

Online finance company Social Finance, which goes by the name SoFi, is moving closer to an initial public offering via its merger with a special purpose acquisition company that votes on the deal Thursday. The SoFi SPAC IPO plans to start trading on Tuesday.


The vote, by shareholders of Social Capital Hedosophia Holdings V (IPOE), is expected to receive swift approval. Social Capital Hedosophia, a blank-check company founded by former Facebook executive Chamath Palihapitiya, valued SoFi at $8.7 billion.

They expect to close the SoFi SPAC IPO deal Friday. Shares of Social Capital Hedosophia will then be exchanged 1-for-1 for SoFi shares when trading begins on the Nasdaq under the ticker SOFI.

SoFi has positioned itself as a one-stop shop for financial services that target a younger demographic. Founded in 2011, San Francisco-based SoFi, no relation to U.K.-based nonprofit consultancy Social Finance, initially focused on student loan refinancing, and recently launched auto loan refinancing.

Investing At The IPO Price

In addition, SoFi will offer its customers the ability to invest in initial public offerings before trading begins in those companies. It will be available for members with at least $3,000 of cash and settled assets in their SoFi accounts.

Organizers traditionally reserve IPO investing for large institutional investors or individuals with ultrahigh net worth.

Online trading app Robinhood is also reportedly working on a plan to offer IPO investing.

SoFi also offers stock and cryptocurrency trading, personal and mortgage loans, and wealth management services. It has more than 2.28 million members. That’s more than double the year-ago period and up 23% from the previous quarter.

SoFi SPAC IPO Filing

SoFi reported first-quarter results last week. It reported adjusted net revenue of $216 million. That was above SoFi’s guidance of $190 million to $195 million. It showed adjusted net income of $4.1 million.

In addition, the company reiterated its full-year 2021 guidance, forecasting adjusted net revenue of $980 million, representing growth of 58% over 2020, with adjusted income of $27 million.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.


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