RANCHO CUCAMONGA, Calif.–CO-OP Financial Services is reporting an unrealized gain of $156-million based on its investment in Alkami, which held an initial public offering (IPO) on April 14.
The figure can change and is based on Alkami’s closing stock price of $45.86 as of April 26.
In 2014 CO-OP initially invested in Alkami, a provider of a cloud-based digital banking platform that supports CO-OP’s Bill Pay, CardNav by CO-OP solutions, as well as Zelle.
The CUSO did not indicate it has any immediate plans for potentially cashing in some of its stock for redeployment elsewhere.
Prior to its IPO, Plano, Texas-based Alkami said it planned to sell six-million shares priced at $26-$28 each. At the time, at the top of that price range, it would have given the company a market cap of $2.3 billion. According to Barron’s, Alkami reported a loss of approximately $51.4-million for the year ended Dec. 31, 2020 on revenue of $112.1 million.
‘Future’ Benefits
In a letter to shareholders, CO-OP CEO Todd Clark said the investment in Alkami “helps provide support for us to further develop our payments ecosystem on your behalf, while remaining financially sound. Just as CO-OP made a wise investment in Alkami seven years ago, we are making the right investments now in a technology ecosystem for your future benefit.”
Saying the company is guided by its annual Product Roadmap, Clark said CO-OP solutions and insights developed over the past year concentrated on services designed to deepen member engagement and win the primary financial relationship, including CO-OP Insights Center, CO-OP Springboard Platform Expansion, Digital Card Issuance, COOPER Fraud Score, CO-OP Lifestyle Loyalty, Zelle and CO-OP Resolution Center.
CO-OP Resolution Center is to become generally available this summer, said Clark, and is designed to be an industry-leading disputes and chargebacks processing solution in order to “dramatically simplify and improve this traditionally complex system.”
‘Significant Rebound’
Clark said CO-OP has released its 2020 audited financial report and, after having planned for a financial loss during 2020 as part of a program to deliver a significant number of new products, services and technologies to its clients, the company has seen a “significant rebound in transaction volumes.”
“Consequently, our board decided not to declare a patronage dividend for 2020 and not to make any payments in 2021 related to previously declared-but-unpaid patronage from prior fiscal years,” wrote Clark. “Rather than borrow money to fund patronage declaration or payment, our board continues to lean into our current cycle of investment by allowing us to reinvest in our future as well as yours.”
CO-OP has scheduled its annual shareholders meeting for May 20 at 2 p.m. ET.