SoFi Technologies Has a Future Worth Speculating On Here

SoFi Technologies (NASDAQ:SOFI) has ambitions to be an all-in-one consumer fintech with deposits, loans, trading and crypto. SOFI stock has lost one-third of its value since being it went public via special purpose acquisition company.

the Social Finance (SoFi stock) logo is displayed on a smartphone.
Source: rafapress /

SoFi’s public profile, with its name on the new LA Rams stadium, is much higher than its performance.

SoFi stock opens today at about $14.50 per share with a market cap of less than $12.4 billion, but it had just $231 million in revenue during the June quarter.

Just $254 million is expected in the September quarter when that’s reported November 11.

I got into SoFi back in August. So far, my investment is down about 4%.  I didn’t buy the stock to flip it. I bought it to hold for at least three years.

A bet on SoFi stock is a bet on the idea that banks and brokers will be replaced by clouds and apps. That’s a good bet. Banks are already becoming storefronts.

I haven’t been inside one for years.

SoFi’s “secret sauce” is Galileo, which is building a set of Application Program Interfaces (APIs) that put banking, brokerage, and loans inside a smartphone.

The plan is to wholesale this through the APIs, and retail it through the SoFi brand name.

Buy a Little SOFI Stock

My position in SoFi is minuscule next to my stock in Amazon.Com (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA) or Microsoft (NASDAQ:MSFT). But it could do just as well over five years because we’re still on the ground floor.

These are still early days.

SoFi also has Anthony Noto, a West Point and Wharton Business grad with experience at Goldman Sachs (NYSE:GS), Twitter (NASDAQ:TWTR) and the National Football League.

Noto is behind the naming rights deal. At 53, he’s just coming into his prime. If like me you “bet the jockey” on stock speculations, Wall Street sees this guy as the second coming of Willie Shoemaker.

Patience Please

Fundamentals, of course, are fundamentals. It doesn’t make sense to pay 12 times revenue for a bank. It’s a valuation that only makes sense for speculators who are willing to wait for their money.

Those are the kind of investors SOFI stock is drawing. TV analyst Jim Cramer was backing it in July, when it first hit its current trading range.

More recently a Mizuho analyst has been telling clients the stock could double.

The stock is currently stalled because its acquisition of Golden Pacific Financial has not yet been approved by regulators.

Golden Pacific is small, but its purchase would make SoFi a real bank, not just an e-seller of banking services. Until the deal is done, revenue is mainly limited to originating and selling loans.

The Bottom Line

My guess is the approval of the Golden Pacific purchase will send SoFi flying.

But you still have time to get in. You’ll even have time to get in after the deal, because it won’t have a huge financial impact.

What you’re buying with SoFi today is a small consumer finance company. What you’re getting, hopefully, is a wholesaler and retailer of online banking and brokerage services.

That’s what the hedge funds who invested in its PIPE were buying. That’s what Mizuho is selling it as. That’s what I think it will become.

We may all be wrong, which is why I still call SoFi a speculation. But if you put a few chips on it I think you’ll thank me in a few years.

On the date of publication, Dana Blankenhorn held long positions in AMZN, MSFT, NVDA and SOFI. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.

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