- Chamath Palihapitiya-backed SoFi Technologies is gaining steam among Redditors.
- Comments about the company, which went public last month, surged on Reddit this week.
- Retail traders noted the end of the post-merger lockup period and the high short interest.
- See more stories on Insider’s business page.
SoFi Technologies is quickly gaining traction among retail investors.
The fintech company that went public via a Chamath Palihapitiya-backed SPAC last month has seen an influx of retail flows in the last week, according to data from Vanda Research.
In a note, Vanda analyst Giacomo Pierantoni and senior strategist Ben Onatibia said the stock is one that “looks increasingly likely to capture some notoriety” as comments about the company accounted for 20% of activity on Reddit’s Wall Street Bets forum in the last day.
The analysts noted the end of the post-merger lockup period and the rise in short interest as “the two main arguments to buy the stock” among retail traders.
One Redditor, who received 500 upvotes, said in a post that the end of the lockup period Monday would give retail traders an opportunity to buy into the stock. Shares dropped 2% Tuesday, and Wednesday they rose 2.1% at 8:40 a.m. in New York.
Another Redditor, who received 1,600 upvotes, posted a bullish view on the company, saying it has a lot of potential.
“The moment I heard SOFI was going public was the moment I dropped a lot of money into it, used the app for a long time and they’re going to be dominating the FinTech sector,” the Redditor said.
Travis Rehl, the founder of Reddit investing-tracker HypeEquity, said in a morning note that many retail investors looking to hold SoFi long-term are comparing it to the next Square or PayPal. Among other financial services, the company has a trading platform called SoFi Invest.
The platform recently announced it would allow users to get in on the initial public offerings of four Palihapitiya-backed blank-check companies. Self-proclaimed “SPAC king” Palihapitiya is a favorite among retail investors, as other companies backed by him, including Clover Health and Virgin Galactic, have become meme stocks.
Read more: These 5 stocks have definite potential for a meme-driven short-squeeze this week, according to Fintel. One of them is even stealing the AMC and GameStop spotlight with its celebrity SPAC status.