- 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 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 areverse stock splitover 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 hasfiled formsto the U.S. Securities and Exchange Commission (SEC) detailing amixed 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 forgeneral 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 companyacquired Technisysearlier 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 haspurchased millions of sharesthis year through the open market. As of June 16, he owns3.56 million shares.
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