SoFi (NASDAQ:SOFI) has been in full focus this week after shareholders voted to give the board discretionary authority to enact a reverse stock split over the next 12 months.
The fintech company provided three main reasons for the reverse split. First, an increased stock price could make SOFI more attractive to brokerage firms and institutional investors. In addition, an increased price could warrant more analyst coverage. Secondly, a higher stock price could improve the view of SoFi as an investment. The company notes that many investors are wary of lower-priced stocks and categorize them as “risky and speculative.”
Lastly, a reverse stock split could attract more talent and partnerships. Some potential employees and partners may view SoFi’s low stock price as a sign that the company is not financially healthy. However, the company notes that it is in fact financially healthy, so an increased stock price could line up perceptions of the company.
Meanwhile, the student loan moratorium is set to expire on August 31. This is extremely significant to SoFi, as student loans accounted for 29.6% of the company’s origination volume during Q1. However, SoFi expects the moratorium to extend for a seventh time and has already reflected this in its guidance.
With many factors on the line, let’s take a look at who is betting big on SOFI stock.
5 Investors Betting Big on SOFI Stock
- Softbank (OTCMKTS:SFTBY): The largest shareholder of SOFI and owns 95.28 million shares as of Q1. In addition, SOFI is also Softbank’s second largest position in its 13F portfolio. In 2015, the multinational conglomerate led SoFi’s $1 billion Series E funding round, along with other investors like Third Point Ventures and Baseline Ventures.
- Vanguard: The second largest holder of SOFI with a 50.86 million share stake. During Q1, the exchange-traded fund (ETF) provider sold off 2.52 million shares.
- Red Crow Capital: Red Crow owns 42.64 million shares, although its position is only accurate as of the third quarter of 2021. During that quarter, the investment company sold off 11.27 million shares.
- Silver Lake Group: Esteemed private equity firm Silver Lake owns 31.15 million shares of SOFI. Furthermore, the firm led SoFi’s $500 million Series F funding round. At the time, Vice Chairman, Mike Bingle described SoFi as a company that is “rapidly transforming personal finance.”
- T. Rowe Price (NASDAQ:TROW): The fifth largest shareholder of SOFI with a 29.26 million share stake. During Q1, the firm sold off 6 million shares. T. Rowe and SoFi also operate a partnership that allow T. Rowe members to access SoFi’s offerings.
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.
