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Title: Dave’s Turnaround: How a Fintech Firm Went from Near Bankruptcy to 934% Year-to-Date Surge
Jason Wilk, CEO of digital banking service Dave, recently recalled the low point of his company’s history, when it dipped below $5 per share in June 2023. Desperate to keep the company afloat, Wilk pitched investors on tiny $5,000 stakes in his firm. Just a year later, Dave is now the top gainer for 2024 among US financial stocks, with a 934% year-to-date surge.
The fintech firm, which makes money by extending small loans to cash-strapped Americans, is representative of a larger shift in the financial industry. Investors had previously dumped high-flying fintech companies that went public via special purpose acquisition companies, but now they are rushing back into financial firms of all sizes, including alternative asset managers and credit card companies.
Dave’s success is credited to its ability to navigate the challenges of rising interest rates and inflation. The company’s business model, which offers fee-free checking and savings accounts and extends small loans to help users pay for gas and groceries, has been able to turn a profit. The company’s shares have been boosted by its ability to manage expenses while growing revenues at an accelerating rate.
According to JMP Securities analyst Devin Ryan, fintechs like Dave and Robinhood are likely to be the most promising stocks heading into next year. Both companies have gone from being unprofitable to incredibly profitable, and Ryan views their valuations as still having a long way to run.
The company’s CEO, Jason Wilk, believes that Dave still has more to prove, noting that the company is still priced 60% below its initial public offering price. However, the company’s turnaround is a testament to its ability to adapt to the changing financial landscape and its potential for growth.