TLDR
- Cathie Wood’s Ark Fintech Innovation ETF sold some SoFi shares last week, though it remains a 3.8% holding in the fund
- SoFi added 905,000 new users in Q3, marking a 34% year-over-year increase in customer growth
- The digital bank recently relaunched cryptocurrency trading and is the only nationally chartered bank offering crypto directly from accounts
- Wood bought other fintech stocks like DoorDash and Bitmine Immersion Technologies while trimming SoFi
- The sales appear tied to portfolio rebalancing rather than lost confidence, as SoFi stock has climbed significantly this year
Cathie Wood’s Ark Fintech Innovation ETF made waves last week by selling shares of SoFi Technologies. The move caught attention since Wood typically champions exactly the kind of disruptive financial technology SoFi represents.
SoFi holds a 3.8% position in Wood’s fintech ETF. The sales came as Ark bought shares of other companies including DoorDash and Bitmine Immersion Technologies. Wood may simply be freeing up capital for new opportunities.
The digital bank continues posting strong numbers. It added 905,000 new customers in the third quarter alone. That represents a 34% jump compared to the same period last year.
SoFi targets younger customers who prefer managing finances through their phones. The company focuses on students and young professionals just starting their financial journeys. This strategy creates long-term revenue opportunities as users need more services over time.
Crypto Trading Returns to Platform
SoFi recently brought back cryptocurrency trading after regulatory changes allowed it. The company had to cut the feature when it received its bank charter. Now it’s the only nationally chartered bank where customers can trade crypto directly from their main accounts.
Users can buy, sell, and trade select cryptocurrencies through the SoFi Money app. They don’t need to open separate accounts or transfer funds to other platforms.
The bank also plans to launch global remittances using blockchain technology. Management committed to rolling out more blockchain-based products for faster and cheaper money management.
Portfolio Management Behind the Sale
Wood’s decision to trim SoFi likely stems from portfolio management rather than concerns about the company’s future. SoFi stock has climbed considerably this year, making it more expensive. Wood’s investment style involves taking calculated risks and moving capital to maximize returns.
She runs an investment company where active trading forms part of the strategy. The sales represented only a small portion of Ark’s total SoFi holdings.
The digital bank keeps breaking customer acquisition records each quarter. Marketing costs have been high, but the company makes more money as it cross-sells new products to existing users. That reduces the need for additional customer acquisition spending.
SoFi’s platform approach lets it grow alongside its users. A student loan customer today might need a savings account, credit card, investment account, and more down the road.
Wood bought other fintech stocks while selling some SoFi shares. This suggests standard portfolio rebalancing rather than a bearish view on the digital bank.
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