Filed
by Social Capital Hedosophia Holdings Corp. V
Pursuant
to Rule 425 under the Securities Act of 1933
and
deemed filed pursuant to Rule 14a-12
of
the Securities Exchange Act of 1934
Subject
Company: Social Finance, Inc.
Commission
File No. 001-39606
FINANCE
SoFi to
give amateur investors early access to IPOs in break from Wall Street tradition
PUBLISHED
FRI, MAR 26 20217:47 AM EDT UPDATED FRI, MAR 26 20219:11 AM EDT
Kate Rooney@KR00NEY
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Online
finance start-up SoFi is offering average investors a way to buy shares of companies as they
go public.
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IPO
shares have historically been set aside for Wall Street’s institutional investors or
high-net worth individuals.
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“Main
Street will have access to investing in a way they wouldn’t have before,” said
SoFi CEO Anthony Noto.
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Anthony Noto, CEO of SoFi
Adam Jeffery | CNBC
Online finance start-up SoFi is lowering
the barrier for amateur investors to buy shares of companies as they go public.
These IPO shares have historically been
set aside for Wall Street’s institutional investors or high-net worth individuals. Retail traders don’t have a way to buy
into newly listed companies until those shares begin actually trading on the exchange. By that time, the price has often gapped higher.
“Main Street will have access
to investing in a way they wouldn’t have before,” SoFi CEO Anthony Noto said in a phone interview. “It gives more differentiation,
and more access so people can build diversified portfolios.”
SoFi itself will be an underwriter in
these deals, meaning it works with companies to determine a share price, buys securities from the issuer then sells them back to certain
investors. It’s common for brokerage firms to get a portion of IPO shares in that process. But they don’t typically offer
them to the everyday investor.
Noto worked on more than 50 IPOs,
including Twitter’s debut, in his former role as partner and head of the technology media and telecom group at Goldman Sachs.
Firms like Goldman generate revenue from Wall Street funds, which often choose to get in on an IPO “based on the access
they get to that unique product,” he said.
“Individual investors don’t
generate those types of revenues, therefore they don’t get access to the unique product,” Noto said. “The cost of serving
retail, if they did decide to do that, would be too high.”
SoFi clients who have at least $3,000
in account value will be able enter the amount of shares they want as a “reservation.” The app will alert them when it’s
time to confirm an order.
Trading app Robinhood is working
on a similar platform to offer access to initial public offerings, including its own upcoming debut, according to Reuters.
Robinhood declined to comment.
SoFi is set to go public by merging
with a blank-check company run by venture capital investor Chamath Palihapitiya. The merger with Social Capital Hedosophia Corp
V valued SoFi at $8.65 billion. The company was founded in 2011 with a focus on student loan refinancing for
millennials and now offers stock and cryptocurrency trading, personal and mortgage loans and wealth management services.
SoFi’s IPO product comes on the
heels of record levels of new, younger traders entering the stock market during the pandemic. That surge has continued into 2021, marked
by frenzied trading around so-called meme stocks like GameStop.
Noto said less than 1% of SoFi accounts
are “active traders” that trade more than three times per day and the company has held off on offering margin or options
trading. Still, he acknowledged the current risk appetite of some retail investors and the dangers of diving into new, unproven companies
as they go public.
“Investing early is inherently
... risky, and those are less-proven companies,” Noto said. “In the same way as cryptocurrency, we disclose to people that
these come with a higher degree of risk.”
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IMPORTANT LEGAL INFORMATION
Additional Information
and Where to Find It
This communication
relates to a proposed transaction between SoFi and Social Capital Hedosophia. This communication does not constitute an offer to sell
or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction
in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such
jurisdiction. In connection with the transaction, Social Capital Hedosophia filed a registration statement on Form S-4 with the Securities
and Exchange Commission (“SEC”) on January 11, 2021, which includes a document that serves as a prospectus and proxy statement
of Social Capital Hedosophia, referred to as a proxy statement/prospectus. The proxy statement/prospectus will be sent to all Social
Capital Hedosophia shareholders. Social Capital Hedosophia also will file other documents regarding the proposed transaction with the
SEC. Before making any voting decision, investors and security holders of Social Capital Hedosophia are urged to read the registration
statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC in connection with
the proposed transaction as they become available because they will contain important information about the proposed transaction.
Investors and security
holders may obtain free copies of the registration statement, the proxy statement/prospectus and all other relevant documents filed or
that will be filed with the SEC by Social Capital Hedosophia through the website maintained by the SEC at www.sec.gov.
The documents filed by Social Capital
Hedosophia with the SEC also may be obtained free of charge at Social Capital Hedosophia’s website at: http://www.socialcapitalhedosophiaholdings.com/docse.html
or upon written request to 317 University Ave, Suite 200, Palo Alto, California 94301.
Participants
in Solicitation
Social Capital
Hedosophia and SoFi and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies
from Social Capital Hedosophia’s shareholders in connection with the proposed transaction. A list of the names of such directors
and executive officers and information regarding their interests in the business combination is contained in the proxy statement/prospectus.
You may obtain free copies of these documents as described in the preceding paragraph.
Cautionary Statement
Forward-Looking Statements
This
communication contains certain forward-looking statements within the meaning of the federal securities laws with respect to the
proposed transaction between SoFi and Social Capital Hedosophia. These forward-looking statements generally are identified by the
words “believe,” “project,” “expect,” “anticipate,” “estimate,”
“intend,” “strategy,” “future,” “opportunity,” “plan,”
“may,” “should,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections
and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to
risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in
this document, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all,
which may adversely affect the price of Social Capital Hedosophia’s securities, (ii) the risk that the transaction may not be
completed by Social Capital Hedosophia’s business combination deadline and the potential failure to obtain an extension of the
business combination deadline if sought by Social Capital Hedosophia, (iii) the failure to satisfy the conditions to the
consummation of the transaction, including the adoption of the Agreement and Plan of Merger, by and between Social Capital
Hedosophia, Plutus Merger Sub Inc. and Social Finance, Inc., dated as of January 7, 2021, as amended on March 16, 2021 (as it may be
further amended, the “Merger Agreement”) by the shareholders of Social Capital Hedosophia, the satisfaction of
the minimum trust account amount following redemptions by Social Capital Hedosophia’s public shareholders and the receipt of
certain governmental and regulatory approvals, (iv) the lack of a third party valuation in determining whether or not to pursue the
proposed transaction, (v) the inability to complete the investments described above, (vi) the occurrence of any event, change or
other circumstance that could give rise to the termination of the Merger Agreement, (vii) the effect of the announcement or pendency
of the transaction on SoFi’s business relationships, operating results, and business generally, (viii) risks that the proposed
transaction disrupts current plans and operations of SoFi and potential difficulties in SoFi employee retention as a result of the
transaction, (ix) the outcome of any legal proceedings that may be instituted against SoFi or against Social Capital Hedosophia
related to the Merger Agreement or the proposed transaction, (x) the ability to maintain the listing of Social Capital
Hedosophia’s securities on a national securities exchange, (xi) the price of Social Capital Hedosophia’s securities may
be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which Social
Capital Hedosophia plans to operate or SoFi operates, variations in operating performance across competitors, changes in laws and
regulations affecting Social Capital Hedosophia’s or SoFi’s business and changes in the combined capital structure,
(xii) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction,
and identify and realize additional opportunities, and (xiii) the risk of downturns and a changing regulatory landscape in the
highly competitive industry. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing
factors and the other risks and uncertainties described in the “Risk Factors” section of Social Capital
Hedosophia’s registration on Form S-1 (File Nos. 333-248915 and 333-249396), the registration statement on Form S-4 discussed
above and other documents filed by Social Capital Hedosophia from time to time with the SEC. These filings identify and address
other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and SoFi and Social Capital Hedosophia assume no obligation and do not intend to
update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither SoFi
nor Social Capital Hedosophia gives any assurance that either SoFi or Social Capital Hedosophia, or the combined company, will
achieve its expectations.
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