![]() ![]() Two, is a credible board of directors with a mix of tech and investment banking experience. SoFi has several things in its favor unlike other recent SPACs, which probably explains why the stock spiked 7% in its trading debut Monday.įirst, is an experienced executive team run by Noto. LOS ANGELES, CALIFORNIA - SEPTEMBER 15: SoFi CEO Anthony Noto looks on before the game between the Los Angeles Rams and the New Orleans Saints at Los Angeles Memorial Coliseum on Septemin Los Angeles, California. Individual companies that have come to market via SPAC in recent months have fallen even harder - for instance, electric vehicle maker Nikola ( a 2020 SPAC) has crashed 46% from its latest January high amid concerns on its viability from short-seller Hindenburg Research. The SPAC and New Issue ETF ( SPCX) - an investment vehicle that invests most of its net assets in SPACs - has plunged 15% from its late February record high. The company's that have arrived to market via SPAC have also been attacked for their eye-popping losses, suspect disclosures and insane forward-looking projections ( see electric vehicle maker Lordstown, for example).Īnd investors have made their concerns about SPACs heard. ![]() SoFi essentially merged Tuesday with blank check company Social Capital Hedosophia, backed by well-known venture capital investor and SPAC fan Chamath Palihapitiya.īut since SoFi announced the transaction back in early January, SPACs have come under considerable fire from investors and regulators for their skirting of the transparency inherent to a traditional IPO process. "We had a unique circumstance in that we had a significant amount that was preferred stock and the IPO wasn't the most easiest and cost efficient way to convert the preferred into common stock, which was necessary for us to apply for a bank license and to be able to go public." "The vehicle for us was a unique way for us to achieve private capital and have certainty of the deal closing, and in addition to going public and having it all in one packaged product," Noto said on Yahoo Finance Live. Given that extensive dealmaking experience - and the uncanny sense of the market that comes with it - it should't be a surprise that Noto opted for a clever SPAC transaction to finally bring SoFi public. ![]()
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