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SoFi (NASDAQ:SOFI) stock is in the spotlight following buys from Cathie Wood’s Ark Invest. On March 4, the Ark Fintech Innovation ETF (NYSEARCA:ARKF) disclosed that it had acquired 782,646 shares of SoFi. However, shares of the company plummeted lower by about 15% the next day after SoFi announced a $750 million convertible senior note offering and the exchange of approximately 61.71 million shares for $600 million of 0% convertible senior notes due in 2026. Barron’s noted that the decline was SoFi’s worst ever one-day loss.
“In connection with the pricing of the notes, SoFi expects to enter into one or more privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or other financial institutions (the “option counterparties”),” explained SoFi. These calls are expected to reduce the dilutive effects upon the conversion of the notes
The proceeds from the offering will be used toward offering fees, the redemption of its 12.5% Series 1 preferred stock and other general corporate purposes.
Wood wasn’t fazed. On March 5, the Ark Innovation ETF (NYSEARCA:ARKK) picked up 1.67 million shares of SOFI stock while ARKF added 235,744 shares.
SOFI Stock: Cathie Wood Adds Shares Following Notes Offering
Following the transaction, ARKK now owns 6.47 million shares of SoFi, making it the 31st-largest position in the exchange-traded fund (ETF) among 36 total. Meanwhile, ARKF now owns 4.09 million shares of SoFi, making it the 14th-largest position in the ETF among 32 total.
In total, Ark owns 10.57 million SOFI shares across all of its ETFs, making SoFi the 35th-largest position out of 126 total positions.
According to Cathie’s Ark, Ark owns 1.08% of all SoFi shares outstanding with a 0.57% portfolio allocation. The investment firm’s average cost tallies in at $8.72, meaning that it is currently holding shares at a loss.
Wall Street analysts seem to echo Wood’s bullish stance, as they have an average price target of $9.26 for SOFI stock. Rosenblatt has the highest target at $22 while Wedbush has the lowest at $2.50.
On the date of publication, Eddie Pan did not hold (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.comPublishing Guidelines.
Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.
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