Mizuho analysts are bullish on SoFi Technologies (NASDAQ:SOFI), maintaining their Buy rating and $12 per share price target on the stock in a note to clients Friday.
The firm believes the company's new $750 million convertible note offering, coupled with a $600 million equity exchange announced earlier this week, could help convert bears into bulls, despite the initial investor worries regarding stock dilution.
"We believe that once investors understand the many positives embedded in the two deals the stock would likely correct upwards," wrote analysts at Mizuho.
Analysts estimate that the equity exchange deal could boost the company's tangible book value per share by 10% and improve capital ratios by over 200bps.
They added that all this is without causing any meaningful EPS dilution. "The new convert helps save over $60mn in annual interest expense per year, paying back the est. ~$ $90mn in capped call costs in 1.5 years," said analysts at Mizuho.