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SoFi stock rises on earlier restart of student loan payments
SoFi stock rises on an earlier restart of student loan payments, dLocal confirms inquiry from Argentine authorities, and Marqeta closes its operations in Australia
It looks like the US government would not default after all with a debt-ceiling deal heading to the House of Representatives for approval. What will investors worry about next? I mean there’s got to be something to worry about, right? In the meantime,
SoFi stock rises on an earlier restart of student loan payments,
dLocal confirms inquiry from Argentine authorities, and
Marqeta closes its operations in Australia
Thank you for reading and see you tomorrow!
SoFi Stock Rises on Earlier Restart of Student Loan Payments
The US debt-ceiling deal, struck by the White House and House Republican leadership, is expected to end the freeze on student loan payments, which was introduced at the onset of the COVID-19 pandemic as a relief program for over 40 million borrowers. The freeze was extended multiple times since its introduction. A restart of the student loan payments will benefit SoFi (NASDAQ: SOFI), a consumer finance company that specializes in refinancing student loans.
The debt-ceiling deal includes a provision to resume student loan repayments by August 29, 2023, which is earlier than previously anticipated. SoFi, which saw its student-loan originations business suffer during the moratorium, is expected to see a boost as the reinstatement of loan payments could lead to increased demand for the company’s refinancing services. SoFi originated $0.53 billion in student loans in the first quarter of 2023, compared to its peak originations of $2.44 billion in the fourth quarter of 2019. SoFi's stock jumped by as much as 11% following the news.
On the company’s most recent earnings call, SoFi management reiterated their commitment to reach GAAP profitability by the end of the year. The company expects to generate $1.96 to $2.02 billion in adjusted revenue and $268 to 288 million in Adjusted EBITDA in 2023. In the first quarter of 2023, SoFI reported a Net loss of $34.4 million and an Adjusted EBITDA of $75.7 million, an improvement from a Net loss of $110.4 million and an Adjusted EBITDA of $8.7 million a year ago.
✔️ Debt Ceiling Deal Would End Freeze on Student Loan Payments. Sofi Stock Jumps
✔️ Restart of Student Loan Payments Included in Debt-Ceiling Deal
✔️ SoFi stock pops on debt ceiling deal
✔️ Buy SoFi Stock, Analyst Says. Sellers Have Got It Wrong
✔️ SoFi Technologies, Inc. Reports First Quarter 2023 Results
dLocal Confirms Inquiry from Argentine Authorities
Uruguayan fintech company dLocal (NASDAQ: DLO) confirmed that it has received a request for information from Argentine authorities in relation to the alleged fraud probe. As I wrote on Friday, Argentine news outlet Infobae reported that the government was investigating dLocal for potential fraud involving cross-border currency transfers amounting to at least $400 million. The company’s stock declined more than 17% on Friday.
dLocal initially refuted allegations in a press release, claiming that the company was not “notified by any Argentinian authority regarding a foreign exchange investigation.” However, yesterday, the co-founder Sergio Fogel, finally confirmed that the company has received a request from Argentine customs authorities, and working on providing the requested information. dLocal's shares advanced 8.41% in yesterday’s trading.
In November, dLocal faced allegations of fraud by the short-seller Muddy Waters Research. The company’s stock was cut in half after Muddy Waters published its report accusing the company of inflating reported payment volume numbers, booking conflicting inter-company transactions, and back-dating accounting entries to reflect stock transactions by the founders. dLocal will host an investor day on June 8, 2023, and I would expect the management to address the latest allegations in detail.
✔️ Uruguay fintech dLocal handling data request from Argentine customs
✔️ Report of Argentina fraud probe sinks shares in dLocal
✔️ dLocal issues response to the press article allegations
✔️ dLocal Reports 2023 First Quarter Financial Results
Marqeta Closes Operations in Australia
Marqeta (NASDAQ: MQ), an issuer processor serving such prominent Fintech companies as Cash App and Square, has announced the closure of its operations in Australia as part of a series of cost-cutting initiatives aimed at improving efficiency. The company has eliminated ten jobs in Australia and two in Singapore as it scales back its services in the Asia-Pacific region. Marqeta had previously announced plans to reduce its workforce by 15% or approximately 150 employees.
The decision to shut down its Australia office comes under the leadership of new CEO Simon Khalaf, who took over from founder Jason Gardner in January. Despite the closure, Marqeta will continue to serve its customers in Australia, including Block’s Afterpay, Klarna, and Zip, and provide support for those looking to launch operations in the region. The company currently maintains operations in North America, including Canada, and Europe.
Speaking at the J.P. Morgan Annual Technology, Media & Communications Conference last week, Khalaf emphasized the importance of achieving operational efficiency, as the company aims to achieve profitability. In the first quarter of 2023, Marqeta reported a Net loss of $68.8 million and an Adjusted EBITDA of negative $4.3 million. The above-mentioned layoffs are expected to result in $40 to $45 million in annual expense savings.
There weren’t that many publicly-traded Fintech companies to invest in five years ago. You could have invested in PayPal (NASDAQ: PYPL) or Square, which later became Block (NYSE: SQ). Unfortunately, you would lose money if you did. You would be better off betting on Jack Dorsey (-0.96%) instead of Dan Schulman (-25.47%), but that would still be a loss.
Seattle, WA, San Francisco, CA, or Remote, United States
Seattle, WA, or San Francisco, CA
Compliance Associate, Argentina
Remote, United States
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Cover image source: SoFi
Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.