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Dave Stock Surges 7%, Adding $274 Million, After Coastal Bank Lifts Receivables Cap

Shares of the financial services company closed at $336.22 Wednesday after its partner bank got room to carry up to $325 million of ExtraCash receivables.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Dave Stock Surges 7%, Adding $274 Million, After Coastal Bank Lifts Receivables Cap

Dave shares climbed 6.83% to $336.22 at Wednesday's close, adding about $274 million in market value, after the company disclosed in an 8-K that its partner bank can now hold more of its ExtraCash advances. The financial services company's subsidiary, Dave Operating, signed an amendment with Coastal Community Bank lifting the cap on ExtraCash receivables Coastal keeps on its balance sheet to $325 million.

How the amended bank deal works

Under the amendment, Coastal holds the ExtraCash receivables for up to 60 calendar days after origination, then sells them to Dave. The higher ceiling expands how many of those advances the bank can carry at once.

The session was Dave's biggest one-day gain since Sept. 2, when the shares rose 9.5%. Dave's total market value stood at $4.29 billion at Wednesday's close.

A big year, still off the peak

Dave shares were up about 42% year to date as of Tuesday's close, ahead of the S&P 500's gain of about 11% over the same span. Even so, the stock closed Tuesday 29% below its highest close of the past year, set on July 16.

In its most recent filed quarter, revenue rose 29.6% to $170.8 million, with net income of $6.7 million.

Dave's next quarterly report is the first chance to see the higher cap in its results.

Sources

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