Why I keep adding to SOFI stock
I have been increasing my position in SOFI (Ticker: Sofi) for a few months now, bringing my average cost down to $18.21 USD. Despite the recent correction in growth stocks in general, I am still positive and bullish for SOFI long term because it is going to be a Superapp and its surging popularity among youths is likely to translate into sustainable growth for years to come.
What differentiates SOFI from other fintech apps and what makes me so bullish on SOFI long term?
1. GALILEO Financial Technologies
Sofi acquired Galileo in Apr20 and this acquisition of Galileo is a game changer as it cements Sofi as a key payment processing platform for the future. Galileo is a powerful payment processing platform which offers an easy solution for companies to create sophisticated payment card programs and digital banking solutions and its key companies include Stripe, Square, Goldman Sachs among others. Galileo has had incredible growth thus far (over 100% YOY) and will be contributing greatly to Sofi's growth in the years ahead.
This is a key differentiator which other payment companies like Moneylion does not have.
2. Bank Charter approval in progress
Sofi has applied for a bank charter and the bank charter should be close to being announced soon in Oct21. With the acquisition of a bank charter, Sofi would be able to lend at a much cheaper rate compared to now, in which they are acting as a middleman instead. This is what other Fintech companies are not able to offer, which can be a key differentiator for Sofi for many years to come.
It appears that the announcement is coming soon, based on the Sofi's updates on their website. Of course it doesn't mean that its a certified bank yet, but this could mean that Sofi is confident to get this bank charter and have been making preparations for it.
Furthermore, Sofi had a recent senior notes offering to meet capital and liquidity requirements for bank charter approval, which coincides with the bank charter application, which could mean that this 750 million raised in this capital offering should be used to support Sofi's rapid national expansion as a bank . Refer to the link below for more information.
3. SOFI's popularity and presence on social media
In terms of branding, Sofi is also the leader in this space as it is the exclusive naming rights partner of SoFi Stadium, the home of the Los Angeles Chargers and Los Angeles Rams. This can help to build on its awareness, recognition and allow it to reach to more customers.
Sofi stadium is also scheduled to be the venue of choice for Super Bowl in Feb22, the college football playoff national championship in Jan23, and also will be the stadium of choice for 2028 Summer Olympics (during opening and closing ceremonies). This can boost its popularity and its member count accordingly.
Sofi is clearly also embarking on social media campaigns to gain brand recognition. Its recent promotional campaign SoFi “Money Moves” contest allows everyone a chance to win a cash prize by participating in a dance contest. As of now, there were 4.5B views for this hashtag on TikTok, which was a tremendous marketing success.
All in all, I am bullish on growth prospects on SOFI long term and I can see it becoming a Tech behemoth in years to come. I will be adding on dips and am cautious to add too many shares at one go due to the current market sentiment.
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