Shares of SoFi (NASDAQ:SOFI) are currently down over 60% this year amid a rising rate and extended federal student loan moratorium. Despite this, insiders, especially CEO Anthony Noto, have scooped up SOFI stock at a high rate this year .
Earlier this year, the fintech company received a national bank charter after it acquired Golden Pacific. As a bank, SoFi can now hold loans on its balance sheet for longer periods of time, which equates to more interest received. The company can also use customer deposits to fund loans instead of borrowing money from other financial institutions at elevated rates.
Meanwhile, President Joe Biden extended the federal student loan moratorium until August 31 during April. On top of that, it has been reported that Biden is considering $10,000 in student debt relief for those making under $150,000 per year. While this is ultimately detrimental for SoFi’s loan business, Noto is in support of student debt relief for those in “severe hardship,” explaining:
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 that in mind, let’s get into the details of the insider transactions.
CEO Noto and Director Schwartz Buy SOFI Stock
On June 13, Noto purchased 46,500 shares at an average price of $5.35 per share. After the purchase, Noto now owns a total of 3.51 million shares. On the same day, Director Harvey Schwartz purchased 53,500 shares at an average price of $5.59 per share. After the purchase, Schwartz owns a total of 283,352 shares. In addition, both purchases were not transacted via a prearranged 10b5-1 trading plan.
Noto has now purchased 630,675 shares of SOFI this year on 17 separate occasions. Furthermore, Schwartz has purchased 126,500 shares of SOFI this year on three separate occasions. Head of Operations Micah Heavener has purchased shares once this year. No other insiders have purchased shares besides the three executives.
Insiders may sell their own stock for a variety of reasons, whether it be for personal expenses, tax purposes, or a loss of faith in their company. However, insiders only buy for one reason: they believe the price will go up. Noto’s relentless buys prove that he has heavy conviction in his company. Insider purchases of this frequency are uncommon, but it ultimately echoes Noto’s faith in SoFi.
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.
