SoFi Could Resell $1 Billion in Stock. What That Means.

  • SoFi Technologies (SOFI) has filed forms to the U.S. Securities and Exchange Commission (SEC) detailing a resale of capital of $1 billion.
  • The capital includes common stock, preferred stock, stock options and warrants.
  • SOFI stock is down more than 55% year-to-date (YTD).
SoFi headquarters. SOFI stock.
Source: Michael Vi / Shutterstock

SoFi Technologies (NASDAQ:SOFI) stock is in the spotlight today after a news-packed week. Shares are currently up almost 5%.

First, shareholders voted last week to give the board discretionary authority to enact a reverse stock split over the next 12 months. SOFI stock shareholders expressed mixed views about this, as reverse splits are generally seen as a negative. However, a higher stock price could possibly attract more institutional interest and analyst coverage.

Now, the fintech company has filed forms to the U.S. Securities and Exchange Commission (SEC) detailing a mixed shelf offering of $1 billion. SoFi will not issue new shares. Instead, existing shareholders will resell their shares.

Existing shareholders who are open to reselling shares include CEO Anthony Noto and Head of Operations Micah Heavener, among others. These shareholders may resell their shares at their discretion. In addition, the resale includes the exercise of previously outstanding warrants and stock options, settlement of restricted stock units (RSUs) and preferred stock.

Let’s get into the details.

SOFI Stock: SoFi Plans on Reselling $1 Billion of Stock

SoFi will not receive proceeds from the resale of SOFI stock. However, the company will receive proceeds by exercising warrants and stock options. SoFi will receive $108 million if all outstanding warrants are exercised and $142 million if all stock options are exercised. It will use these proceeds for general corporate purposes, such as for “working capital, acquisitions, retirement of debt and other business opportunities.”

As a result of this offering, shareholders are speculating that SoFi Technologies may be eyeing an acquisition. However, the company acquired Technisys earlier this year for about $1.1 billion. Therefore, another acquisition could be perceived as too speedy, drifting away from the core business. SoFi is also planning on reselling 82.45 million shares related to the acquisition of Technisys.

Noto himself believes that SoFi is financially healthy with a “durable business.” Still, the offering raises concerns on why the company needs the additional capital in the first place. Further, Noto is eligible to sell more than 2.85 million shares of common stock and 22,581 warrants. The CEO has purchased millions of shares this year through the open market. As of June 16, he owns 3.56 million shares.

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.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


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