SoFi Just Helped Everyday Investors Buy the Biggest IPO Ever. Here’s Why It’s More Important Than One Hot Deal.
I Space Exploration Technologies The initial public offering (IPO) set a record last week, raising an estimated $85 billion and achieving a valuation of $1.8 billion in the open market. That estimate has already risen to $2.5 trillion, too SoFi Technologies (NASDAQ: SOFI) played an important role in acquiring shares from the daily retail investors.
Retail investors helped boost SpaceX stock on its first day of trading. According to the The Wall Street Journalthey bought $18 million worth of stock within the first 20 minutes of trading, and by the end of the day, they had bought $118 million.
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SoFi’s participation in the SpaceX IPO is more than a one-time stunt or gamble. There are far-reaching consequences that can have a positive impact on a company for years. Here is the reason.
IPO access to SoFi
SoFi has raised its retail access to IPOs for years. It has offered shares in several high-profile IPOs, including Rivian, Nu Holdings share price, Figmaagain Cerebral Systemsand SpaceX and others. It provided access to the only private equity fund that owns SpaceX through 2024, and still provides access to other highly sought-after private equity firms.
SpaceX CEO Elon Musk has made it a priority to allow more retail investors access to the SpaceX IPO, and about 30% of the shares have been reserved for them, according to reports. The stock is made available through five different brokerages, including SoFi. SoFi only once Robinhood Markets granted unconditional access. Since the IPO was oversubscribed, it is unlikely that many investors will receive their full applications.
SoFi probably has a strong goal of flipping. All brokerages discourage selling IPO shares within 30 days of purchase, and SoFi will bar the flipper from future IPO access for 180 days, with the second violation resulting in a 365-day ban and the third in a permanent ban. It also reserves the right to charge a $50 fine if the IPO stock is sold within 120 days. That policy encourages customers to hold stock and stick to the platform.
One stop shop for SoFi
SoFi’s status as one of the five companies selected to reach the SpaceX IPO could attract new business to its space, especially since it has fewer purchase conditions. Onboarding new customers is a big part of the company’s growth strategy right now as it builds its brand, and it reported 1.1 million new additions in the first quarter.
