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SoFi IPO Investing: How It Works and What to Expect
SoFi’s IPO Investing feature gives retail investors early access to initial public offerings—something traditionally reserved for institutional investors.
To participate, users need a SoFi Active Invest account and must confirm interest before the IPO pricing.
Here’s how the process works:
Reserve Shares in Advance: You can view upcoming IPOs and submit an “indication of interest” through the app. If demand exceeds supply, shares are allocated proportionally or randomly.
No Account Minimums Required: Unlike traditional IPO access that favors large investors, SoFi allows everyday users to participate without requiring a high balance.
Shares Priced at IPO Value: If selected, you'll receive the IPO shares at the same price institutional investors pay—before they begin trading on the open market.
Long-Term Incentives: To reduce volatility, SoFi may offer loyalty incentives for holding IPO shares for a defined period.
This democratizes IPO access, but it’s not without its risks and limitations.
How to Invest in IPOs on SoFi: A Step-by-Step Guide
SoFi gives everyday investors early access to IPOs without needing to be a high-net-worth individual. Here’s how to get started effectively:
1. Open and Fund a SoFi Active Invest Account
To participate in IPO investing through SoFi, you need an Active Invest account—this is separate from SoFi’s automated investing product. There’s no account minimum, but you must have enough available cash to cover your potential IPO share purchase.
You can deposit funds instantly via linked bank accounts.
There are no management fees, but ensure your balance is settled before the IPO closes.
SoFi doesn't charge a commission on IPO participation, aligning with its broader low-fee model.
2. Browse Upcoming IPOs and Submit Interest
Once your account is funded, you can view a list of upcoming IPOs through the app or web platform. Tap into an IPO profile to see its prospectus, estimated price range, and timeline.
Submit an “Indication of Interest” (IOI) to reserve shares before the IPO pricing.
You may be asked to reconfirm your intent once the final price is set.
There’s no guarantee you’ll receive shares, as allocation is based on demand and availability.
Submitting an IOI is free and non-binding unless you’re allocated shares.
3. Confirm Participation When Pricing Is Finalized
After the IPO is priced—usually the evening before trading begins—SoFi will notify you to confirm your purchase. You must act quickly, as windows for confirmation are short.
The IPO price is the same for all investors, including institutions.
If you don’t confirm in time, you’ll lose your spot.
You’ll receive a notification in-app and via email, so monitor both closely.
This step is crucial because pricing signals final demand and market sentiment.
4. Receive Shares and Monitor Market Opening
If you're allocated shares, they’ll appear in your SoFi account when the stock begins public trading. SoFi processes the purchase automatically—no manual buying is needed.
There’s no transaction fee for IPO shares.
Be prepared for immediate volatility, as prices often spike or dip quickly.
SoFi may offer “IPO loyalty rewards” if you hold the shares for a period, but this varies by offering.
You can review past IPO performance to assess whether to hold or exit early.
SoFi IPO Investing Limitations: What Are the Risks?
While SoFi opens IPO access to more investors, there are important limitations and risks you should consider before participating.
Limited Share Allocation: Because demand often outweighs availability, you may only receive a partial share allotment—or none at all—despite expressing interest.
Volatility After the IPO: IPOs often experience significant price swings on their first trading days. For example, stocks like Rivian dropped sharply post-IPO despite early hype.
Lack of Research Coverage: IPOs typically have limited historical data or analyst coverage, making it harder to evaluate fair value compared to established stocks.
Lock-Up Period Pressures: While you’re free to sell, insiders are often restricted. As lock-ups expire, a wave of insider selling can drive prices down.
Not All IPOs Perform Well: According to FactSet, many IPOs underperform the market in their first year—especially in volatile or uncertain economic conditions.
Therefore, it’s crucial to assess each IPO case-by-case and consider your long-term investing goals.
