SoFi Runs Out Of Luck On The Stock Market

Personal finance company, SoFi, saw its stock lose 11.8% to fall to $20 during Friday's trading session on the NASDAQ stock exchange. It however recovered later in the day to close at $20.82, bringing its loss to 8.82%.

This is a sharp drop for the stock which traded at $23.12 in its first two days after the closure of its SPAC deal with Social Capital Hedosophia Holdings V to become a public company. After the merger was completed on the 28th of May, SoFi took over Social Capital Hedosophia Holdings V’s listing on Monday the 31st, changing its symbol to "SOFI."

The company gained ground in its first two sessions thanks to enthusiasm from investors. On the first day of trading on the exchange, the stock went up 12% - a rather impressive start. However, this is starting to wane as the stock started to drop after just two days on the bourse.

The SPAC deal placed the value of SoFi at $8.65 billion, which is a great start for the well for the company and its investors. SoFi recorded about $2.4 billion in cash proceeds through the transaction, which will help the company further its expansion in the rapidly digitizing space of financial services. 

Investors are also set to gain massively from the company, as DCM, one of its early-stage investors, notes that its investment in SoFi “is expected to be nearly a fund returner” at this point. Even at the price of $20.81 per share the company’s market capitalization still stands at around $15 billion, which is 87 times more than it was worth when DCM invested in 2011.

About Sofi Technologies stock 

Based in San Francisco, SoFi provides a range of financial products which includes student loan refinancing, mortgages, personal loans, credit cards, investing, and banking through their mobile app and desktop interface. The mobile app is especially popular with Millennial and Gen-Z consumers. 

It was founded in August 2011 by a group of friends in Silicon Valley, Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady.

In September 2012, SoFi raised $77.2 million in a funding round, led by Baseline Ventures, alongside other participants - DCM and Renren.

Two years later in April 2014, SoFi raised $80 million in a Series C round which was led by Discovery Capital Management with participation from Peter Thiel and Wicklow Capital.

In February of the next year, 2015, the company announced a $200 million funding round led by Third Point Management and another funding round in 2019 led by Qatar Investment Authority worth $500 million. 

At the time of its going public, its valuation was at $9 billion.

When is Sofi Technologies' stock lockout date? 

Sofi stock price may be affected when it's time for insiders and early investors to be allowed to sell. This is called the lock-out date.