SoFi (SOFI) – Board of Directors & Perspective – February 3, 2024

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SoFi (SOFI) – Board of Directors & Perspective – February 3, 2024


SoFi will add Dana Green to its board as the 11th member. She was a Senior VP and Senior Bank Supervisor at the Federal Reserve Bank of New York for 32 years and retired in 2023. She was in charge of oversight for Systemically Important Financial Institutions (SIFI) with “complex risk profiles.” She has served on several Federal Reserve committees and brings incremental, deeply relevant experience to an already strong board. SoFi aspires to grow into SIFI status. Bringing on the former top regulator is not the action of a company with anything to fear or hide about its accounting practices.

Quick note on SoFi giving back all of its gains post earnings. I’ve well documented how I think the stock will remain immensely volatile as analysts bicker about items like discount rates. I’d point those analysts to the transcript where SoFi told you the discount rate benefit was fully hedged and had no impact on results. I’d then point them to a financial valuation textbook and how falling benchmark rates mean falling discount rates, which supports fair value. It raised the discount rate as benchmark rates rose through 2023; it cut the discount rate as that trend reversed. Alert the presses!

What makes me so comfortable with the polarization and volatility? A constantly trustworthy management team that just set 3 year targets 50% ahead of consensus on EPS and 500 bps ahead of consensus on revenue growth. That’s what matters. If they hit those targets like they have all other targets, despite the loan moratorium, a historic hike cycle and a pandemic, then the rest is loud, distracting noise to be ignored. My mind is wide open to being wrong here, but I’d have to actually see data-driven evidence of that being the case. Hasn’t happened. I’ll continue to use overly negative noise and price action to slowly add more shares like I did late this week. Social media ~analysts~ can keep complaining about every single detail while SoFi just keeps executing. As long as that remains the case, they will keep deserving my time energy and attention. They have conditionally earned my support. Keep fundamentally thriving and ignore the haters, SoFi.

Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases

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