SOFI Stock Sell-Off: Big Investors Jump Ship. Should You?
A handful of large-scale financial traders reduced or eliminated their positions in SoFi Technologies (NASDAQ:SOFI) stock. Should this be a deal-breaker for prospective investors? Not necessarily, as a high-court ruling could have a major, positive impact on SoFi Technologies and its stakeholders.
It’s been fascinating to watch the market dislike SoFi Technologies for a while, and then suddenly favor the company. Stock traders can overreact sometimes, sending shares too low or too high.
Sensible investors can avoid these traps by simply focusing on the facts. They can avoid disaster by keeping any share positions in SoFi Technologies down to a reasonable size.
Why Did Some Big Investors Dump SOFI Stock?
Not long ago, InvestorPlace contributor Larry Ramer identified three bank stocks that have big investors running for the exits. It’s worthwhile to note large-scale share purchases and sales, so let’s see who divested shares of SoFi Technologies.
As Ramer reported, some of the big investors that sold SOFI stock include Virginia Retirement Systems (which sold 29,300 shares), George Soros’s hedge fund Soros Fund Management (1.25 million shares) and investment bank Jefferies (NYSE:JEF) (91,644 shares).
Other sellers include billionaire investor Ken Griffin (13.9 million shares) and Steven Cohen’s hedge fund Pont72 (3.9 million shares).
There’s no way to know for certain why they unloaded so many shares of SoFi Technologies. Remember, it’s entirely possible that they were just taking profits. After all, SOFI stock doubled in price from the beginning of 2023 to mid-June.
Maybe some of those financial whales know something that most amateur traders don’t. So, it’s not a terrible idea to maintain a small position size in SoFi Technologies shares, if you choose to have one at all.
A Major Catalyst Is Coming for SoFi Technologies
Even if some big shareholders dumped SOFI stock, it still deserves a “B” grade for several reasons. SoFi Technologies has demonstrated outstanding revenue growth. It’s also encouraging to see the company getting closer to profitability.
Furthermore, there’s a huge catalyst coming for SoFi Technologies. Per Barron’s, the U.S. Department of Education announced that the first required federal student loan repayments “will be due starting in October.”
Not only that, but interest on those loans “will begin accruing earlier than that, on Sept. 1.”
Additionally, the Supreme Court rejected the Biden administration’s initiative to potentially forgive/waive millions of federal student loans. SoFi Technologies generates some of its revenue from helping students refinance their loans.
Therefore, a deluge of financially strapped borrowers could soon appeal to SoFi Technologies for help.
SOFI Stock May Deserve a Small Investment
Clearly, SoFi Technologies will benefit from recent developments pertaining to federal student loan repayments. Also, the company appears to be improving its top- and bottom-line results.
On the other hand, we can only speculate about why some big investors sold their SoFi Technologies shares. All in all, SOFI stock gets a “B” rating and might earn an “A” grade later this year, so financial traders can choose to start a small share position with the option of building it later on.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
