Following SoFi’s public float via a special purpose acquisition company (SPAC), the Fintech said it will allow retail investors to participate in IPOs in certain blank check firms.
SoFi (NASDAQ:SOFI), a one-stop-shop that offers a multitude of financial services, challenges Robinhood in targeting a younger generation of investors. Last month, SoFi listed shares on the Nasdaq as part of a SPAC deal with Chamath Palihapitiya’s Social Capital Hedosophia Holdings Corp. V.
Today @anthonynoto rang the opening bell on @Nasdaq, celebrating SoFi’s first day as a publicly traded company. We’re so excited to help a whole new generation of people get their money right: https://t.co/rm0tqltZNC #SoFiListed pic.twitter.com/BEMMMSTKML
— SoFi (@SoFi) June 1, 2021
According to reports, four SPACs sponsored by Palihapitiya will give retail investors an opportunity to buy shares in the IPOs on the SoFi platform. Frequently, IPOs will experience an initial pop once shares trade and shareholders who purchase at the IPO price may quickly generate a capital gain. In a SPAC deal, shareholders may also benefit from an affiliated warrant. While no investment entails a guaranteed return, by empowering retail investors to invest at the same price as underwriters these shareholders stand a better chance of generating a return. SoFi already allows access to certain IPOs for retail investors – a practice that has become somewhat commonplace for both Fintechs and more traditional online brokers.