Why SoFi Stock Popped 10% Today

Source The Motley Fool

Shares of SoFi Technologies (NASDAQ: SOFI) jumped as much as 10.5% in early trading Monday after the company announced a $2 billion personal-loan financing deal. The stock pulled back slightly but was still up 9.3% as of 12:30 p.m. ET today.

The $2 billion boost for SoFi stock

Fortress Investment Group agreed to provide $2 billion in financing for the platform for personal loans. SoFi CEO Anthony Noto said this would help his company "serve the financial needs of more members and diversify toward less capital-intensive and more fee-based sources of revenue."

As it stands, SoFi finances most of its loans through cash, debt, and deposits on its balance sheet, just like a normal bank would. But the company wants to provide loans as a service to SoFi users without taking on the financial risks involved in being in the loan business. A great way to do that is to have a financial partner take the risk, in this case Fortress, while SoFi just takes a fee for facilitating the loan.

SoFi's asset-light future

The platform and financial services businesses SoFi has built are relatively capital-light, and that allows for high growth and high margins. The lending business hasn't had the same characteristics, but deals like this could change that.

An increasing number of finance partners could allow the company to grow personal loans, student loans, home loans, credit card balances, and even margin loans. This could just be the start of unlocking even more of SoFi's potential.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,266!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,047!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $389,794!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 14, 2024

Travis Hoium has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD gains momentum to near $3,650, eyes on US CPI releaseThe Gold price (XAU/USD) gains momentum to near $3,645 during the early Asian session on Thursday.
Author  FXStreet
Sep 11, Thu
The Gold price (XAU/USD) gains momentum to near $3,645 during the early Asian session on Thursday.
placeholder
Japanese Yen climbs further amid safe-haven demand; political risks could cap gainsThe Japanese Yen remains on the front foot against its American counterpart for the second successive day on Wednesday, though it lacks bullish conviction amid a mixed fundamental backdrop.
Author  FXStreet
21 hours ago
The Japanese Yen remains on the front foot against its American counterpart for the second successive day on Wednesday, though it lacks bullish conviction amid a mixed fundamental backdrop.
placeholder
Silver Price Forecast: XAG/USD rebounds toward $52.50 within overbought zoneSilver price (XAG/USD) trades around $52.30 per troy ounce during the Asian hours on Wednesday after recovering losses registered in the previous session.
Author  FXStreet
19 hours ago
Silver price (XAG/USD) trades around $52.30 per troy ounce during the Asian hours on Wednesday after recovering losses registered in the previous session.
placeholder
Gold crosses $4,200 for first time on Fed rate-cut bets, US- China trade woesGold crossed the key $4,200-per-ounce threshold for the first time ever on Wednesday.
Author  Reuters
17 hours ago
Gold crossed the key $4,200-per-ounce threshold for the first time ever on Wednesday.
placeholder
Bitcoin Price Forecast: BTC recovery capped amid US-China trade tensions, prolonged government shutdownBitcoin price edges below $112,500 on Wednesday, struggling to extend its rebound amid renewed macroeconomic headwinds.
Author  FXStreet
15 hours ago
Bitcoin price edges below $112,500 on Wednesday, struggling to extend its rebound amid renewed macroeconomic headwinds.
goTop
quote