71.4 F
New York
Thursday, May 23, 2024

SoFi CEO defends convertible debt offering

BusinessSoFi CEO defends convertible debt offering

Nvidia CEO Huang: We're making computers smarter so people don't have to learn computer science

In a Wednesday interview with CNBC’s Jim Cramer, SoFi CEO Anthony Noto explained why the online personal finance company issued a convertible debt offering, saying it was a way to lower debt costs.

“We did this deal from a position of strength,” Noto said. “What we saw was an opportunity, from that position of strength, to lower our cost of debt.”

The company announced in early March it planned to raise $750 million by issuing convertible senior notes. In the same announcement, SoFi also said it entered into agreements with certain holders of existing convertible notes to exchange them for shares.

SoFi’s stock soon dropped and is now down about 26% year to date.

The company reached GAAP profitability for the first time during the fourth quarter of 2023. Noto said that SoFi had been performing so well it can now issue debt at a lower rate.

“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.”

Don’t miss these stories from CNBC PRO:

Nvidia's a market maker, not share taker, says CEO Jensen Huang

Jim Cramer’s Guide to Investing

Source link

Check out our other content

Check out other tags:

Most Popular Articles