SoFi, an underappreciated Trump trade, falls by the most in a year

SoFi Technologies was one of the stocks that got slammed on Monday. Its drop of more than 10% puts it on track for one of its worst days in about a year.

As is the case with other big movers on Monday, there doesn’t seem to be much in the way of market-moving news on the business fundamentals of the fintech firm that would justify the day’s downturn.

But thematically, SoFi’s tumble seems in keeping with other stocks that soared on the election of President Trump and have sputtered hard in the recent weeks.

The shares of the company rocketed higher after last November’s presidential election, as traders bet that the company would benefit from less strenuous regulation under Trump, as well as expectations that the Trump administration would be less generous with student loan forgiveness, potentially pushing more to borrow from companies like SoFi.

Again, nothing in the news would suggest that anything has changed on those fronts, other than the rapid erosion of investor confidence and enthusiasm that pushed SoFi’s price-to-earnings multiple to a nosebleed level 60x earnings over the next 12 months, a postelection premium that’s almost completely evaporated.