Chamath Palihapitiya is at it again. On Thursday, he announced that Social Capital Hedosophia Holdings V (NYSE:IPOE), yet another of his blank-check companies, would take SoFi public. As IPOE stock races ahead, here is what you need to know about the upcoming SoFi SPAC merger.
To start, investors should get a sense of the basic story. Importantly, Palihapitiya is the man behind several recent, high-profile special purpose acquisition companies. You can thank him for Opendoor (NASDAQ:OPEN) and Clover Health (NASDAQ:CLOV), which will begin trading on the Nasdaq Exchange tomorrow. In fact, Palihapitiya is behind Virgin Galactic (NYSE:SPCE), one of the first SPAC mergers in recent history.
Now, he is making a big bet on SoFi, a player in the fintech space. With that in mind, here is what you need to know about IPOE stock and the SoFi SPAC merger:
- IPOE stock came public in October 2020, making it the fifth blank-check company bearing the Social Capital Hedosophia name.
- At the time, Social Capital Hedosophia raised $700 million by offering 70 million units at $10.
- Palihapitiya and Ian Osborne, IPOE president and director, bring a vast amount of experience in identifying tech winners to the table.
- Additionally, Palihapitiya and Osborne are huge champions of the recent SPAC craze that has dominated the public markets.
- With this in mind, it is more clear why IPOE stock is up more than 60% in intraday trading.
- Palihapitiya announced on social media that Social Capital Hedosophia would bring SoFi public.
- The SoFi SPAC merger comes as Palihapitiya says legacy banks are failing.
- Because of this, he believes consumer expectations and behaviors are shifting toward fintech startups like SoFi.
- He says consumers are looking for low fees, accessible services, transparent lending and a one-stop shop for financial products.
IPOE Stock and the SoFi SPAC Merger
So what else do you need to know about IPOE stock and the SoFi SPAC merger? How about how SoFi fits into the red-hot fintech story?
Essentially, SoFi is an online fintech startup that specializes in all things personal finance. It helps customers with student loan refinancing, mortgages, personal loans, credit cards, investing and banking. Additionally, SoFi offers these students through desktop services and a mobile app.
Investors who are big fans of Palihapitiya will know that he often is looking for so-called 10x opportunities. With that in mind then, what are the numbers for SoFi? According to the SoFi SPAC merger one-pager, things are looking bright for the fintech. The company has received more than 56,000 ratings in the app store and claims more than 1.8 million active customers. Additionally, Palihapitiya is modeling significant revenue and profit growth for the company. Expectations are for adjusted net revenues to grow with a five-year compound annual growth rate of 43%. He also estimated profits of $27 million in 2021 expanding to profits of $1.17 billion in 2025.
For investors then, that means IPOE stock could represent the opportunity to get in on the ground floor of a fast-growing fintech. Keep a close eye on the SoFi SPAC merger, and make sure to do your own research. Based on the previous enthusiasm surrounding Social Capital Hedosophia, this blank-check company will certainly continue to be in the spotlight.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.