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Why SOFI Stock Fell Over 4%? Is There a Road to Recovery?

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The US Supreme Court recently agreed to hear the Biden Administration’s plan concerning the student loan forgiveness program. This can significantly affect companies like SoFi Technologies (NASDAQ: SOFI) who provide education loans to university students. Unfortunately, SOFI stock was hanging low in the market, trading at its all time low.

S&P and NASDAQ Influencing SoFi Technologies

The share fell over 4% to reach $4.32 at the publication time. The plunge does not have any correlation with any company news, as there was none in the market. Though NASDAQ and S&P 500 fell by more than a percent, delivering a direct effect on companies.

Sofi Technologies operates in multiple businesses including crypto, lending, investing and more. In 2013, it landed a deal with Barclays and Morgan Stanley to create bond backed P2P loans. It joined forces with Coinbase to offer a crypto trading platform which allows users to trade virtual assets like BTC, ETH, LTC and more.

Currently, the students hold $1.745 Trillion of debt in the United States. In Q1 2022, 92.7% of debt was federal and 7.3% belonged to the private sector. Average federal loan has risen by $119.94 by the third quarter of the year. A total of 48.8 Million borrowers have acquired fed student loans.

Data Source: Education Data Initiative (Chart Creation: Canva)

SOFI Stock Chart Analysis

Sofi Technologies shares traded at around $16 during January 2022. The chart shows an annual bear trend and is currently experiencing the worst phase since its NASDAQ listing. The stock has created downtrend throughout the year and lost over 70% from its value.

The bollinger bands show a sideways momentum where SOFI stock is close to the support. If the trend continues, we can see a breakdown soon. There’s no significant company event lined up this month so the price is likely to be influenced by the indices like S&P 500 and NASDAQ.

Fed’s recent announcement regarding the interest rate hike ranging from 0.5 to 0.75%. This may deliver a negative effect to the indices, and eventually on SOFI stock. The company has not experienced any profits this year, but has managed to lower the quarterly loss percentage this year.

They witnessed $110 Million in losses during the initial quarter this year but managed to bring the figure to $74 Million in Q3 2022. The company also saw an improved revenue stream over the year where the latest quarter earnings showed $419 in revenue with $26 Million positive surprise.

The fall of FTX exchange has created a negative sentiment among the investors which is likely to deliver a direct hit to the company’s crypto business.

Anurag
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