Nuclear startup Deep Fission announced Monday that it has gone public in a reverse merger, netting the company $30 million.
No, it’s not 2021.
The startup is proposing to build small, cylindrical nuclear power plants and lower them into 30-inch diameter holes drilled one mile down into the Earth. By burying the reactors, the company hopes to solve several problems that plague current reactors, including concerns over meltdowns and potential terrorist attacks.
Deep Fission’s 15-megawatt reactors are cooled using pressurized water, the same type found in nuclear submarines and many existing power plants.
Earlier this year, Deep Fission inked a deal with data center developer Endeavor to build 2 gigawatts of underground reactors.
As recently as April, the startup had been attempting to raise a $15 million seed round. In August, Deep Fission and nine other nuclear fission startups were selected to be a part of the Department of Energy’s Reactor Pilot Program, essentially a streamlined permitting process.
Under the terms of the reverse merger with four-year-old Surfside Acquisition Inc., the offering was priced at $3 per share, below the customary $10 that other SPACs target. The new entity will retain the Deep Fission name, and though its shares aren’t yet trading, it says it intends to quote on the OTCQB.
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The circumstances around the SPAC — the share price, the selected equity market, and the timing of the transaction — suggest that Deep Fission wasn’t able to raise cash from new or existing shareholders, who first capitalized the company with a $4 million check last year.
The proceeds of the merger give the startup a bit more runway than its ill-fated seed round would have, but it also imposes SEC reporting costs for what is likely a small company operating in a very expensive sector. Deep Fission is hoping to start its first reactor by July 2026.
Financial services is an industry desperate for some innovation. In an age when just about anything can be accomplished online, the idea of going to a brick-and-mortar bank to complete a basic transaction is not appealing.
Fintech businesses that operate at the intersection of technology and finance, such as Stripe, Chime, Plaid, and others, have brought some much-needed disruption to legacy financial services. But investors can only access those companies through special investment vehicles as they are still private.
However, one emerging publicly traded fintech is SoFi Technologies(NASDAQ: SOFI). SoFi went public a few years ago following a merger with a special purpose acquisition company (SPAC) led by billionaire investor Chamath Palihapitiya.
With shares trading at a modest $7, investors might be wondering if SoFi is a lucrative opportunity in the budding fintech realm. Let’s dig into why it’s a unique investment prospect and see if the company has potential to generate returns strong enough to help make you a millionaire.
SoFi’s business model is interesting
SoFi is creating a one-stop shop for members on its platform, with access to a host of online services including student loans, mortgages, and stock market investing. This variety of products under one roof has allowed SoFi to cross-sell to its user base.
This approach is known as a flywheel business model. In theory, by cross-selling at a high rate, SoFi does not need to allocate as many resources to customer acquisition over time. Subsequently, the company can use its capital to double down on additional product innovation, thereby making SoFi a formidable competitor for traditional financial services companies.
Image source: Getty Images.
But the long-term potential could be enormous
SoFi’s business model might look attractive on the surface, but investors need to understand that this has been costly to create. Over the last several years, the company has completed a number of acquisitions to help build out its platform. These transactions, combined with efforts to amass a large member base, have resulted in staggering operating losses. Until now, that is.
During the fourth quarter, ended Dec. 31, SoFi surprised investors by posting its first-ever profit on the basis of generally accepted accounting principles.
What’s even better is that management told investors that ongoing profitability can be expected through 2026. This is encouraging because it legitimatizes SoFi’s differentiated business model.
With consistent profitability on the horizon, investors might wonder if SoFi has untapped potential capable of producing lucrative returns.
Could SoFi stock make you a millionaire?
The chart below compares SoFi with peers in fintech on a price-to-sales (P/S) basis. At a P/S of just 3.3, it is in the middle of this cohort.
The important idea for investors is to double down on their winners and hold their highest-conviction positions over the course of many years or even decades.
Take Warren Buffett as an example. The Oracle of Omaha has owned a lot of different stocks over the years. But financial services have consistently remained a top sector for him, with companies like Bank of America, American Express, Visa, and Mastercard representing pillars of the Berkshire Hathaway portfolio.
Investors with a long horizon should consider SoFi’s potential amid a growing fintech sector. The company’s ecosystem of services could make it a future leader as the sector evolves, and I am optimistic that management will make good on its guidance and that steady profits will become more of a staple of its business.
These factors should play a role in SoFi’s growth over time. I think the company’s best days could be ahead, and it has the potential to be a millionaire maker in the long run.
Should you invest $1,000 in SoFi Technologies right now?
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American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Adam Spatacco has positions in Block and SoFi Technologies. The Motley Fool has positions in and recommends Bank of America, Berkshire Hathaway, Block, Mastercard, Upstart, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
Trump Media & Technology Group stock (DJT) has hit a milestone that will secure Donald Trump an additional $1.1 billion.
According to a regulatory filing, Trump is entitled to an additional 36 million shares if the company’s share price trades above $17.50 “for twenty out of any thirty trading days” over the next three years.
Trump secured his “earnout” bonus at the end of Tuesday’s trading session, with the stock trading around $33 a share at the close.
Trump Media, the parent company of Truth Social, went public on the Nasdaq after merging with special purpose acquisition company Digital World Acquisition Corp. in a deal approved by shareholders late last month. Shares are down nearly 60% since the end of March.
Short interest in DJT stock — bets that the stock price will fall rather than rise — is about 13% of outstanding shares, according to the latest data from S3 Partners. The company recently attempted to fend off short sellers by advising investors on ways to prevent their shares from being loaned for short-interest positions.
Trump maintains a roughly 60% stake in the company. At current levels, Trump Media boasts a market cap of roughly $4.3 billion, giving the former president a stake worth around $2.6 billion. Right after the company’s public debut, Trump’s stake was worth just over $4.5 billion.
Republican presidential candidate former President Donald Trump does a little dance after speaking, Tuesday, April 2, 2024, at a rally in Green Bay, Wis. (AP Photo/Mike Roemer) (ASSOCIATED PRESS)
The former president founded Truth Social after he was kicked off major social media apps like Facebook (META) and Twitter, the platform now known as X, following the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on those platforms.
According to an updated regulatory filing released earlier this month, Trump Media reported sales of just over $4 million as net losses reached nearly $60 million for the full year ending Dec. 31. The company warned it expects losses to continue amid greater profitability challenges.
The filing also confirmed stakeholders are still subject to a six-month lockup period before selling or transferring shares. The only exception to the lockup period would be if the company’s board votes to make a special dispensation. Although possible, experts told Yahoo Finance last month the attempt would likely result in multiple lawsuits on behalf of public shareholders.
