Unsurprisingly, SoFi (NASDAQ:SOFI) CEO Anthony Noto has already purchased SOFI stock three times this month. Year-to-date (YTD), the CEO has now purchased shares of his own company on 14 separate occasions, with his first purchase falling on March 4. Shares of SoFi have fallen by over 30% since then.
The personal finance company has been stuck in limbo as investors await President Joe Biden’s decision on partial student loan forgiveness. Biden has stated that he is nearing a decision that is most likely to be disclosed in either July or August. Meanwhile, people familiar with the discussions say that the forgiveness would range around $10,000 per borrower. Individuals making more than $125,000 per year would not be eligible for the debt reduction.
Around 40 million people in the U.S. owe about $1.6 trillion in federal student loan debt. While student loans are a major driver to SoFi’s business, Noto is in favor of debt forgiveness. He explains:
“It’s time to do the harder, right thing instead of the easier path of kicking the can down the road, and wasting taxpayer money.”
With or without the student loan forgiveness, Noto adds that “SoFi will be fine either way.” He cites the company’s “record financial results” and profitability status in 2021.
With that in mind, let’s get into the details of the insider purchases.
CEO Anthony Noto Buys More SOFI Stock
On June 1, Noto purchased 21,215 shares of his own company at an average price of $7.07 per share. Five days later, he scooped up an additional 21,750 shares at an average price of $6.89 per share. Then, on June 8, the CEO bought 16,907 more shares at an average price of $6.64 per share. After the purchases, Noto now owns a total of 3.38 million shares. In addition, the dollar value of his purchases this month is $412,455.
None of Noto’s June purchases were transacted via a prearranged 10b5-1 plan. This shows that he finds the current price of SoFi to be reasonable.
Shareholders Vote on Reverse Stock Split
In a proxy statement for the upcoming June 12 shareholders meeting, it was revealed that shareholders will be voting on an amendment to grant SoFi’s board the power to enact a reverse stock split over the next year. Shareholders will not be voting whether to enact a reverse stock split, but rather the option to give SoFi’s board the power to initiate a reverse stock split. SoFi noted that any reverse stock split would reduce outstanding shares by a ratio of between 1-2 and 1-10.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
