SoFi CEO Anthony Noto Discusses Debt Offering and Company Performance
In a recent interview with CNBC’s Jim Cramer, SoFi CEO Anthony Noto shared insights into the online personal finance company’s decision to issue a convertible debt offering. Noto explained that the move was made from a position of strength and was aimed at lowering debt costs for the company.
SoFi announced plans in early March to raise $750 million through the issuance of convertible senior notes. Additionally, the company entered into agreements to exchange existing convertible notes for shares. Despite the announcement, SoFi’s stock has faced a 26% decrease year to date.
Noto highlighted that SoFi achieved GAAP profitability for the first time in the fourth quarter of 2023, which allowed the company to issue debt at a lower rate. He emphasized that the move would have a negligible impact on GAAP earnings per share and would be accretive to tangible book value per share by 8 to 10%.
“We saw it as an opportunity to do it and have a negligible impact on GAAP earnings per share and also, combined with a buyback, have it be accretive to tangible book value per share by 8 to 10%,” Noto said. “The reason why we did it is really important, because I think this is what will put some momentum back into the stock.”
Despite the drop in stock price, Noto remains optimistic about the company’s performance and the potential positive impact of the debt offering. Moving forward, SoFi aims to leverage its strong financial position to drive growth and further enhance shareholder value.
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