SoFi Technologies (NASDAQ:SOFI) represents the future of personal finance, but not everyone likes the company. That’s fine, since the company’s insiders are buying SOFI stock and it’s still trading at a very reasonable price right now.
There’s some debate surrounding SoFi Technologies and this must be discussed. However, after considering what the arguments are about, you’ll surely agree that SoFi Technologies is still in great shape and investors can just stay long and strong in 2024.
Which Insider Bought $5 Million Worth of SOFI Stock?
Typically, insider buying activity is a great sign for a publicly traded company. Therefore, it’s good news that SoFi Technologies CEO Anthony Noto reportedly purchased a whopping $5 million worth of SoFi shares during the past 12 months.
In total, SoFi Technologies insiders bought $10 million worth of SOFI stock. This suggests that SoFi’s insiders have conviction in their company – but does this mean you should consider starting or adding to a share position?
It depends on your outlook for SoFi Technologies. Do you prefer to invest in old-school, traditional banks? Or, do you seek exposure to the next generation of personal finance products and services?
Here’s an example of what I’m talking about. SoFi Technologies just launched an exchange traded fund called the SoFi Enhanced Yield ETF (NYSEARCA:THTA). This fund pays dividends (or more precisely, “distributions”) every single month. This should appeal strongly to modern passive-income investors.
THTA invests in “one to three month short-term Treasury Bills while also implementing a data-driven options overlay strategy.” Of course, I won’t guarantee that this fund will be a blockbuster success.
It’s an example of how SoFi Technologies continues to think outside the box and try out ideas that boring big banks won’t even consider.
The Debate Over SoFi Technologies’ Accounting Practices
As you may recall, SoFi Technologies really knocked it out of the park in 2023’s third quarter. Amazingly, the company’s adjusted EBITDA soared 121% year over year. Also, SoFi’s net revenue increased 27% – not too shabby, you must admit.
Still, the critics will always find something to complain about with SoFi Technologies. Lately, there’s been some controversy concerning SoFi’s accounting practices. It’s a little complicated, so refer to this summary from Barron’s.
Basically, SoFi Technologies resells personal loans for profits that haven’t been realized yet. Some accounting sticklers might object because SoFi “recognizes that anticipatory markup on its income statement and balance sheet.”
Chris Lapointe, SoFi’s financial chief, explained this accounting practice. “At time of origination, we mark the loan at the fair value and the premium or discount to par is recognized as revenue in the quarter it occurs,” Lapointe stated.
The most reasonable response to this debate is to be aware of it and continue to monitor SoFi Technologies’ financials. None of this needs to be a deal-breaker. I expect the controversy to be transitory. At the end of the day, most investors will be more interested in SoFi Technologies’ rapid growth than the in finer points of the company’s accounting calculations.
SOFI Stock Is Cheap and Insiders Are Buying It
SoFi Technologies demonstrated crucial growth in 2023’s third quarter. Besides, the company never ceases to surprise investors with intriguing products and services.
Therefore, don’t get hung up on debates and distractions. SOFI stock under $10 is a terrific bargain, so do what some of SoFi’s insiders have done: start a share position and add to it throughout the year.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
