The SharesPost marketplace makes it easy to research private growth companies and transact in their shares and tokens. LevelX also offers Pre IPO investing for accredited investors in companies like SoFi. I am your host, Jason Moser, and on this week's financial show, we're going to dig a little bit more into a brand new IPO out there in Upstart Holdings. I'm not saying there is not a use case. Enter your email address to subscribe to this blog and receive notifications of new posts by email. Branchless banking and decentralized finance? We're going to get the fourth quarter earnings. It was a little better as listeners probably know. In Upstart's case, they want to assess the risks better than banks do. Frankel: It's a fee income business model. Frankel: That's not going to prevent a Reddit thread from popping up. ... Sofi. ... Social Finance (SoFi… It's essentially a payment processing business with about 50 million accounts. I don't care. Many are okay with a branchless, fully digital financial partner like SoFi, and would consider putting their money into non-financial service companies they already use regularly, such as Square or PayPal. There's no doubt about it. It's trading at a huge premium because he's been so successful with the other ones. That sounds impressive, right? Like I mentioned in other posts, some platforms allow investors to invest in pre-IPO companies. Upstart is really pursuing that. The new one, SoFi, it's been agreed upon, so it's going public under a SPAC that you can buy on the market right now. Virgin Galactic was another one. But is this demographic really a force in the markets? [laughs] That's OK, don't worry, we still own PayPal, so we got part of it there. [laughs] I'm not in the 18 -29 age group anymore, that'd be nice. I mentioned Upstart's trading at about 20 times revenue, so far it's trading at about eight times revenue and that's including about $2.4 billion in cash. I get why they see a big use case at it, I really do. This is a company, one of the co-founders, David Gerard, who's the CEO of the business and co-founder, owns I think somewhere in the neighborhood of 16% of the shares. What does Upstart do? Right around $32,800, right before we started recording this. I think we've homed in on one there in artificial intelligence, and using data to make decisions. The things I'm watching are the default rate. They are growing pretty impressively. You have some opinions on the matter. Frankel: On that note, it's interesting to point out how Upstart makes its money. PreIPOSwap.com 1/9/2021 — New York, NY — With the news of another Pre IPO company going public via SPAC (SoFi) investors are … And last but not least, we discuss the recent correction in bitcoin and other cryptocurrencies, and why Matt and Jason aren't likely to buy bitcoin anytime soon. I get the early adopters who loved the technology and things like that. If someone else figures out how to address that market equally well or better, then you could see a lot of competition risks. So far, like you said, 75% reduction in loss ratios, it looks like it's working so far so that [laughs] technology is really that good. Frankel: Upstart is trying to become a financial technology company that partners with banks and just to help them do their existing business better. You just go into the bank, you get your loan, and then that's that. That's really not that much time. Not earning, it's 20 times sales. SoFi will go public via a SPAC … All these companies are electing to go public via SPAC and have some advantages, cost, and otherwise. Stay up to date on the latest stock price, chart, news, analysis, fundamentals, trading and investment tools. I mentioned that Upstart has done a little over 600,000 loans in its history, SoFi has 1.8 million members and all of these other products. They have a robo-advisor, there's an insurance division that partners with other insurance companies to offer products to their members. You gave it the old Ricky Bobby. A high-level overview of Social Finance (SOFI) stock. SoFi is not yet publicly traded, but there is a way to claim a piece of this exciting company’s innovation and growth potential before any IPO. Frankel: Well, like you said, they are pretty recent IPO, and given the times, like every other IPO, they've shot through the roof since they [laughs] went public. The new CEO, Charlie Scharf, has prioritized expense reduction, saying he wants to cut I think $10 billion of expenses off the bank. I hereby self certify that I am an Accredited Investor because: Late Stage Mature Pre IPO Unicorns - PreIPOSwap.com, Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on WhatsApp (Opens in new window). It goes public, raises usually a few $100 million, then it seeks an acquisition target. You can still buy that one pre-deal. SoFi is a lot more than a personal lender at this point. We wanted to dig into this one today for listeners. Game on! I don't see the use case that's going to appeal to main street. I think that with any of these types of businesses, particularly in this current market, the way IPOs have been received, at least in the near-term valuation, has to be at least a concern. They're valuing SoFi at about $8.65 billion, including the $2.4 billion and new money that's coming in. [laughs] But I got to believe the biggest risk, it's not just valuation, it's got to maintain its growth, and there's a huge element of competition risk in this space. Because that was an advantage that Xoom really built out, in building their risk model was ultimately building out these data points, that help them assess risks far better than these traditional players in that remittance space. Most importantly, SoFi is not actually a bank or financial institution. That's the brief overview of how SPAC works. That seems to be the case. 82% of millennials have no issue with switching banks. What else stands out to you about this business that makes it special? Frankel: They use things like that. I did go through the process of getting some small business administration loans done for folks who were self employed, 15 years ago, maybe even more. If they can address that area of the lending market, which is millions of people better than anyone else, they're going to keep growing like this. Western Union's been doing it for over 100 years. It's been around for a little while, and it's interesting to see how these businesses evolved because it really started out as an alumni funded lending model that ultimately it was just helping students and graduates deal with student loans. Regardless of your opinions of bitcoin, this volatility first makes me tell you to be careful. SoFi is a finance company that offers a range of lending and wealth management services. But I still don't see the benefit to converting my U.S. dollars to bitcoin to be able to use them on PayPal when I can just take my U.S. dollars and use them on PayPal. Greetings, Wishing all of our readers a very happy and healthy new year! They take many factors – including your level of interest – into consideration before setting an IPO (or Pre-IPO) … [laughs] Of those, $270 billion of cryptocurrency value is not bitcoin. For one, forget about the scarcity thing where you can't make more gold, but potentially there could be more bitcoin made. Forget about that. They visit brick-and-mortar lenders less often—if they visit them at all. No, I won't do that. Jason Moser: It's Monday, Jan. 11. At the same time, it's trading for about 20 times sales. They applied for and received conditional approval, like you said, in October, they got conditional approval for a bank charter. While many have never heard of Social Finance or SoFi, it’s valued at $8 Billion USD which puts it not exactly at the bottom of the list. This is unusual, as retail investors typically don’t get allocated pre-IPO shares, and instead must get into markets on the first-day trading rush (at inflated prices). In this week's Industry Focus: Financials, Fool.com contributor Matt Frankel, CFP, and host Jason Moser discuss what Upstart does and why investors are so excited. A full transcript follows the video. Their lack of loyalty to a specific financial brand—which differs from their parents’ and grandparents’ generations—points to the possibility that millennials mostly see major banks as interchangeable and are looking for specific ways banks can help them. Not only that, I checked right before we came on here, there are 4,308 different cryptocurrencies that are officially recognized right now. Moser: [laughs] Yeah, it seems that way every week for you. There's data there that shows more and more consumers, particularly even younger consumers, really are trusting of a lot of these tech companies that partner with financial service providers in order to ultimately get done whatever they need to get done. Private Equity “Pre IPO” – Investing in companies before they go public Private Equity is an asset class which involves unregistered securities. Frankel: The brief overview is a SPAC which stands for special purpose acquisition company. Sign up today to learn more about SoFi stock. It's a $1 billion-dollar SPAC that is still looking for its acquisition target. Since 2009, SharesPost has successfully closed thousands of client investments. It probably deserves its own hour. This reminds me a little bit of a company from a little while back. 2, the argument that it's a store of value, like gold. Moser: Well, I mean, I've got thoughts too, but I'm going to go ahead and let you start. From Like you said, they started as a community-based student lender, refinancing loans, issuing private student loans, they branched out into mortgages. I've mined bitcoin. [laughs] You've got it figured out. SoFi wants to be the bank of the future. But what is SoFi (Not to be confused with “Sophie” a popular toy dog name) ? Much of that growth, rising from 10 million at the start of 2020, has been fueled by the coronavirus pandemic as millennials have increasingly seen opportunity in the beaten-down stock market. Now, it's easier than ever to switch from one currency to another. Now, with that said, this is also a business that actually has recorded -- I can't believe it -- positive net income, this thing is actually profitable? Another company that we talked about on this show before, and a firm, I think John Maxfield and I did show a little while back when we went through a firm's S-1, and there was just an interesting data point in there that really spoke to how consumers view the state of finance today. SoFi will go public via a SPAC … That's a group that historically banks have not been very easy to deal with. Frankel: But I am in the self-employed group. I'm not saying it's not special. Also, a private company is not generally required to disclose financial or business information to the public. To put it another way, if an existing shareholder wants to sell some of their shares, they … He could stand to make billions if this goes well. This is why people, I think it was Venezuela that had a hyperinflation if I'm not mistaken. That's a market that this non-traditional credit model, by companies like Upstart, can really help solve. I mean, a majority consensus is why we have things like bitcoin cash, the offshoot cryptocurrency. I know that you had a great conversation, not all that long ago with Dan Caplinger and you had gone over some of the basics here in regard to SPACs and how they work. But what they have done is created a branding for Millenials that works, powered by PR and stats: LevelX also offers Pre IPO investing for accredited investors in companies like SoFi. The last time we heard from Wells Fargo was the third quarter when the pandemic had not subsided, but it was definitely at a low. Now that companies like Palantir, Airbnb, and many others have filed for IPO; investors are looking further down the line at companies like SoFi that may eye an IPO at some point in the near future. [laughs] Maybe that's a little bitterness coming through. It seems like there isn’t anything you can’t get at SoFi. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. Argument three that I get, and this is the one that's going to make people really mad, is that there is no real use case for it. See if it was possible cases, were still going onto the third quarter, for example, you. To switch from one currency to another management story too right up our alley million then! Bull listeners, give us a quick primer there on SPACs is $! 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The right price value does n't seem that insane a personal lender that...

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