In this article, Jason Wilk, the CEO of digital banking service Dave, recalls a challenging period during his tenure as the head of a publicly-traded company. In June 2023, the company’s shares had dropped below $5 each. To sustain Dave, Wilk attended a conference in Los Angeles for micro-cap stocks, where he pitched investors on small $5,000 stakes in the company. Wilk described this time as one of the toughest in his life, transitioning from a $5 billion company to $50 million within a year.
Despite the initial struggles, Dave became profitable in the subsequent months, consistently surpassing revenue and profit expectations set by Wall Street analysts. As of 2024, Wilk’s company is the top performer among U.S. financial stocks, with a 934% year-to-date surge. JMP Securities analyst Devin Ryan believes that Dave’s success reflects a broader trend that is still in its early stages.
In 2022, investors had turned away from high-flying fintech companies, including Dave, due to concerns about profitability. However, with the Federal Reserve lowering interest rates, investors have re-entered the financial sector, favoring firms like KKR, American Express, and Goldman Sachs. Ryan highlighted fintech companies like Dave and Robinhood as particularly promising for the future, noting their transition from losses to profitability.
While traditional financial institutions have also benefited from the easing cycle initiated by the Fed, the election of Donald Trump further boosted interest in the sector. Trump’s anticipated regulatory changes have positively impacted established players like JPMorgan Chase and Citigroup, as well as potential disruptors like Dave.
Dave has carved out a niche by providing fee-free checking and savings accounts to underserved Americans. The company generates revenue primarily by offering small loans to users until their next paycheck, avoiding costly alternatives like bank overdraft fees. Dave also issues debit cards, with transaction interchange fees contributing significantly to its revenue.
Although Dave now enjoys more analyst confidence compared to mid-2023, Wilk acknowledges that the company’s stock price remains significantly below its IPO level. Despite the progress made, Wilk believes there is still more to achieve and hopes for a resurgence in the company’s valuation.
