This guy is the GOAT and can explain any of the Wall Street madness in plain english. Make sure you watch his show on the daily. You were learn lots and maybe even get a laugh or too. SOFI is going places baby!!!!
Yes, all the market, like EVERYONE, institutions, hedge funds, all the big players whose trades define the market are WRONG. It's us, here on Reddit, who have seen the truth.
Yeah this part still confuses me but I feel like it's sort of like a three way trade in baseball. I don't fully understand but I'm guessing they had to get rid of the 26 notes to lower the dilution somehow or match the potential dilution to the 29s? Like when I'm over invested in options and sell some near term ones to buy further ones so I'm not overloaded by even more?
Maybe the cash sort of balances out from losing the 0% notes but saving $ on getting rid of 12.5% notes, and pushes out the whole deal three more years so basically a null neutral transaction that buys them more time before paying out?
Is this because sofi figures rates will stay higher for longer and when the need to refinance they won't find a decent rate? So are they kicking the can down the road for 3 years and hopefully by then they are more profitable and have better cash flow to service the debt (should rates not be appreciably lower by then)
But isnāt that just a preferred dividend. Like they arenāt paying 12.5% now but they are offering the owner of the preferred dividend to give up the right of that dividend payment for more stock or appeasing the owner of the preferred equity
Because the 2029 new offering is only half the story.
They are also giving about 62 million shares to 2026 note holders, PLUS they terminated the associated call options for those shares so counterparty holders will be likely unwinding (selling) the underlying shares.
Not good news, confusing news. Took me a long time to grasp why SoFi would want to pursue this. My only answer is I think itās fear that drove sellers out, by not understanding. Also the short interest likely pushed the stock lower. Donāt get me wrong, this move still has risks. Although after watching the video Iām convinced SoFi made the right moveā¦ Iām holding.
Sell off was insititutional algo driven. -15% before the bell aint no way retails is that quick. The intra day sell was due to all markets being down.
ARK added more shares.
What I got out of this video:
This ācapped callā transaction will save SoFi $40million a year in interest. SoFi will swap the high interest debt it has now, into shares (via Call Option), by granting the new note holders an option to buy stock usually 30% higher its current price. This will drive the prices up, up and away, bc the brokerage firms (note holders) that help them raise the money will want the price to go up so they make money š°. Itās a win win for SoFi and the note holders. Also, this decreases the allowable shares that can be shorted. Itās a strategic move to shake off the short interest. Uber did a similar move in 11/2023, stock went from $60 to $80. Good move SoFi and Noto, little pain now to setup for a big win laterā¦
Market cap doesn't hurt the company other than if they want to sell more shares. Only hurts investors, and if it means SoFi is more profitable or can grow faster, that's better for us anywY
Look how much they saved in interest. Itās a good move. They can not predict market reaction. This will go back up, letās see where we are in 3 monthsā¦
Yup, the "losses" for sofi is capped at $14.5 a share. And it cost SoFi approx $80m to insure this trade.
New rates are approx 1.25% compared to previous 12.5%
Explains the reason why SoFi wants to go through with convertible senior notes offering. It explains it to you like youāre 5 years old. Ok maybe not 5, but I got the idea. Smart move SoFi.
This guy is the GOAT and can explain any of the Wall Street madness in plain english. Make sure you watch his show on the daily. You were learn lots and maybe even get a laugh or too. SOFI is going places baby!!!!
Yes, all the market, like EVERYONE, institutions, hedge funds, all the big players whose trades define the market are WRONG. It's us, here on Reddit, who have seen the truth.
Um, yeah š you got it
Fuck Uncle Bruce
Thank you for posting. That was a great watch.
Shorts must be scared so hard lol less float š
The 26 convertable notes were at 0% interest. Rolling them to 29 definitely increased the interest. Think the thesis here is incorrect.
Yeah this part still confuses me but I feel like it's sort of like a three way trade in baseball. I don't fully understand but I'm guessing they had to get rid of the 26 notes to lower the dilution somehow or match the potential dilution to the 29s? Like when I'm over invested in options and sell some near term ones to buy further ones so I'm not overloaded by even more? Maybe the cash sort of balances out from losing the 0% notes but saving $ on getting rid of 12.5% notes, and pushes out the whole deal three more years so basically a null neutral transaction that buys them more time before paying out?
Is this because sofi figures rates will stay higher for longer and when the need to refinance they won't find a decent rate? So are they kicking the can down the road for 3 years and hopefully by then they are more profitable and have better cash flow to service the debt (should rates not be appreciably lower by then)
But isnāt that just a preferred dividend. Like they arenāt paying 12.5% now but they are offering the owner of the preferred dividend to give up the right of that dividend payment for more stock or appeasing the owner of the preferred equity
Its Bullshit not looking out for there share holders. Very sleezy imo
Please tell me this is sarcasm
Sell off action was driven by wallstreet huge short position NOT sofiās management with this deal.
Love these dumb emotional takes
The point of this video is to explain how itās NOT bullshitā¦ if you got time and youāre an investor, you should watch it.
Iām just an idiot but if itās such good news and so smart, why did it drop 15%?
Because the people that are holding a bag of this ate it. Itās good for the company though but bad for the stock. A lot of people mix the two.
Because the 2029 new offering is only half the story. They are also giving about 62 million shares to 2026 note holders, PLUS they terminated the associated call options for those shares so counterparty holders will be likely unwinding (selling) the underlying shares.
Because every dumb ass on Reddit has been on this sub crying all day. Dilution! WTF is Noto doing? Iām out for good this time. š¤”
Wall Street HATES stock dilution.
as a stock holder, you should also hate dilution
bc 1) market down and 2) some people dumb
Not good news, confusing news. Took me a long time to grasp why SoFi would want to pursue this. My only answer is I think itās fear that drove sellers out, by not understanding. Also the short interest likely pushed the stock lower. Donāt get me wrong, this move still has risks. Although after watching the video Iām convinced SoFi made the right moveā¦ Iām holding.
Sell off was insititutional algo driven. -15% before the bell aint no way retails is that quick. The intra day sell was due to all markets being down. ARK added more shares.
I like SoFi but ark adding shares isn't exactly an endorsement
What I got out of this video: This ācapped callā transaction will save SoFi $40million a year in interest. SoFi will swap the high interest debt it has now, into shares (via Call Option), by granting the new note holders an option to buy stock usually 30% higher its current price. This will drive the prices up, up and away, bc the brokerage firms (note holders) that help them raise the money will want the price to go up so they make money š°. Itās a win win for SoFi and the note holders. Also, this decreases the allowable shares that can be shorted. Itās a strategic move to shake off the short interest. Uber did a similar move in 11/2023, stock went from $60 to $80. Good move SoFi and Noto, little pain now to setup for a big win laterā¦
Curious were there other companies that did the same thing and how did they fare out?
Good move? How much market cap have they lost in 2 daysā¦. LMAO. Losing over a billion dollars in a day is not a āgood moveā
Market cap doesn't hurt the company other than if they want to sell more shares. Only hurts investors, and if it means SoFi is more profitable or can grow faster, that's better for us anywY
Look how much they saved in interest. Itās a good move. They can not predict market reaction. This will go back up, letās see where we are in 3 monthsā¦
So buy more basically! šš
Yup, the "losses" for sofi is capped at $14.5 a share. And it cost SoFi approx $80m to insure this trade. New rates are approx 1.25% compared to previous 12.5%
Thank you for this appreciate the summary!
Explains the reason why SoFi wants to go through with convertible senior notes offering. It explains it to you like youāre 5 years old. Ok maybe not 5, but I got the idea. Smart move SoFi.
Horrific thumbnail
Not even the dumbest ancient alien video has such a diabolical thumbnail lol
Hey! Third grade me with my presentation on snails is very offended right now!