Whats next for SoFi stock after Chamath Palihapitiya SPAC merger?
S oFis [SOFI] stock has received growing levels of retail investor attention on social news platform Reddit recently, but unlike GameStop [GME] and others, dont think of it as just another short-squeeze target. SoFi (short for Social Finance) Technologies is a US mobile-first fintech firm created in 2011 by four Stanford University students to disrupt the student loans sector. Since then, the company has added a range of financial services, and is now more akin to a digital bank, offering mortgages and personal loans, plus stocks and cryptocurrency trading. Sofis stock closed up 12.41% at $22.65 on its first day of trading after going public by merging with Social Capital Hedosophia Corp V, a special purpose acquisition company (SPAC) run by venture capitalist Chamath Palihapitiya. The deal, announced in January, valued SoFi at $8.65bn, reported CNBC. Ex-Facebook [FB] executive Chamath Palihapitiya has already taken multiple companies public through the increasingly popular SPAC route, including Virgin Galactic [SPCE]. After SoFis stock got off to a flying start as Palihapitiyas Social Capital Hedosophia Corp V [IPOE] SPAC began trading under the ticker SOFI on 1 June, the share price peaked the following day at $24.95, a 23.82% jump from its 28 May close at $20.15  its last day of trading as IPOE. Since then, however, SoFis stock price has stagnated, closing below the $20.00 level every day since 25 June. On Tuesday 6 July, SoFi closed at $17.35  13.89% below its pre 1 June open. While its still very early days, its also likely that some of the share price gains were already baked in, after the deal to take SoFi public was revealed in early January. On 7 January, when Palihapitiyas SPAC deal was announced, the IPOE share price jumped 57.26% from $12.12 to $19.14. Taking that into account, SoFis stock (formerly IPOE) is up 45.34% year-to-date. The heightened retail trader attention should offer a boost to SoFis share price over the medium term. Travis Riehl, founder of retail and Reddit investor analytics platform HypeEquity, believes that a significant number of retail investors are planning to hold SoFi stock long-term, believing that it could turn out to be the next Square [SQ] or PayPal [PYPL], reports Natasha Dailey wrote in Markets Insider. In a further boost to SoFis popularity among the Reddit trading community, Palihapitiya is a favourite among retail investors, Dailey said. Lango also notes that broker Rosenblatt Securities has recently initiated coverage on SoFi stock with a buy rating and $30 price target, which he says is a huge vote of confidence. Among the two Wall Street analysts covering the stock, SoFi has an average 12-month price target of $27.50, giving the stock a possible upside of 52.10% on last weeks close. Both analysts rate SoFi a buy. We see a unique buying opportunity as a result of this recent selling and ahead of a potentially significant upside catalyst (bank charter approval) - Rosenblatt analyst Sean Horgan  Rosenblatt analyst Sean Horgan said: We see a unique buying opportunity as a result of this recent selling and ahead of a potentially significant upside catalyst (bank charter approval), reports TipRanks. Horgan added: Pressure from early investors taking profits (and short-selling ahead of the lock-up expiration) are likely to weigh on the stock in the near term. However, we expect SoFi's bank charter approval process to conclude before year-end (adding >25% upside to our EBITDA estimates). Our base-case price target of $30 and downside case of $17 reflects asymmetrical risk/reward to the upside.