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Down 25% in November, Is SoFi Technologies a Buy Right Now?

By Neil Rozenbaum – Dec 1, 2021 at 7:00AM

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The recent drop in price might make this fintech stock very attractive, especially with so many upcoming positive catalysts.

In this video, I give an update on SoFi Technologies (SOFI 0.35%) and talk about why the bank carter is a game changer and what Galileo brings to the table. You can find the video below, but here are some of the highlights. 

  • Let's remind ourselves of what SoFi is trying to do: get your money right. It does this by giving its members personalized advice every day when they go into the app about what they must do, what they should do, and how they can improve their financial well-being. This way, SoFi forms a kind of bond with its members and gets to attract so-called HENRY customers: "high earner, not rich yet."
  • Right now SoFi relies on bank partners to provide services through SoFi Money. When and if the company gets a bank charter, it will be able to be more flexible with its rates, it may provide its members with deposit accounts, and it will basically become Galileo's bank partner. The more money that flows inside SoFi's ecosystem the better. This is a bit like what Square is doing with the seller side, Cash App, and now Afterpay Touch Group.
  • Galileo is a payments-processing platform that in a way powers neo-banks and other financial companies such as Chime, Robinhood Markets, and MoneyLion. Galileo is the infrastructure in the background that helps these companies deal with issuing credit cards, performing transfers, and (obviously) creating accounts.
  • The bank charter is not the only catalyst that might push this stock higher. At the start of next year, the CARES Act expires, and that will give SoFi's lending business a big boost. 

*Stock prices used were the closing prices of Nov. 30, 2021. The video was published on Dec. 1, 2021.

Neil Rozenbaum owns shares of SoFi Technologies, Inc. The Motley Fool owns shares of and recommends SoFi Technologies, Inc. The Motley Fool has a disclosure policy. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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