Don't Do It, SoFi! A Reverse Stock Split Won't Help Shareholders
SoFi Technologies (NASDAQ: SOFI) has gotten some attention in the marketplace in recent months. It is one of the few companies to wholeheartedly embrace fintech while operating a traditional bank. Buying the naming rights for SoFi Stadium, where the NFL hosted the 2022 Super Bowl, also added to its name recognition.
However, with a share price of only around $6, it's now considering a proposal to allow its board to execute a reverse stock split. While a reverse split may make sense from a particular perspective, SoFi would probably better serve its shareholders by rejecting this proposal.
SoFi will hold its annual shareholder meeting on July 12. On its proxy statement is a proposal allowing (but not requiring) the company to institute a reverse stock split between the ratios of 1-for-2 and 1-for-10 shares.
Source Fool.com
