Social Finance, better known as SoFi stock, went public via a SPAC merger with Social Capital Hedosophia Holdings Corp V in June 2021. SoFi stock began trading on the NASDAQ under the ticker “SOFI” on June 1st, 2021 at an opening price of $22.65 per share.
If an investor had put $10,000 into SoFi stock at its $22.65 IPO price and held the shares to today, their investment would now be worth approximately $3,360. Here is the breakdown:
Initial Investment at IPO
- Invested $10,000
- Bought 441 shares at $22.65 per share
Value After 2.7 Years
- SoFi stock price as of Jan 26, 2024 closes at $7.62 per share
- 441 shares now worth $3,360
This represents a 29% decline in value over the 2.7 years since SoFi went public. An initial $10,000 investment would now be worth around $3,360 if held continuously until today.
SoFi stock price saw early optimism in the first few months after its IPO, reaching prices over $20 per share. However, high growth tech stocks broadly sold off through late 2021 and 2022 as the Federal Reserve raised interest rates.
Rising rates negatively impact high growth fintech disruptors like SoFi more than established banks. Investor appetite for risk and growth stories has declined substantially.
However, the core business continues to perform well –
SoFi’s user base and products have grown quickly. SoFi’s quarterly results show that they had strong year-over-year growth in both members and goods in the third quarter of 2023.
They added a record number of members—over 717,000—bringing the total number of members on their platform to over 4.3 million. They lend money, give credit, have stock accounts, and more.
Long term investors could see substantial upside if SoFi continues executing operationally on their business model. However, in the near term macroeconomic uncertainties may continue to pressure fintech valuations and stock prices.
In summary, a hypothetical $10,000 investment in SoFi stock at its $22.65 IPO price in June 2021 would now be worth approximately $3,360. The 29% decline is driven by broader risk-off selling and rising rate pressures on high growth fintech names.
But disciplined long-term investors may still see strong returns over time if SoFi grows into its still lofty $7.3 billion market valuation.