SoFi stock drops for the third day in a row
The sell-off in shares of the online financial services firm may reflect broader jitters about the economy and tariffs.
Online financial services firm SoFi Technologies slumped for the third straight session Thursday, pushing its year-to-date losses to more than 18%.
There’s little direct news on the stock, so it’s tough to say exactly what’s perturbing the markets about SoFi lately. But it’s not alone: Upstart Holdings, another online lender, is also getting clobbered and is down roughly 6%.
Our best guess is that the downdraft is related to generalized jitters about a weakening economy. That seems consistent with the story the stock market is telling today. Recession-proof areas like consumers staples — which include safety stocks like Verizon, Clorox, and Conagra — are the winners on the day, after the White House’s latest tariffs seemed to throw a wet blanket on growth expectations.
Online lenders like SoFi are already seeing delinquency rates rising, as their rates on both student loans and personal loans rose in February. And a downturn in the job market would likely make matters worse.
As far as SoFi is concerned, the administration giveth and taketh away. SoFi was as an underappreciated Trump trade. Between the election and early January, it soared more than 65%, surging along with other financial firms on expectations that President Trump’s victory in the election would translate into tangible business benefits, perhaps from reduced regulatory scrutiny.
Like other Trump trades, the stock has become something of a favorite among retail traders. It made the list of top 10 net retail buys over the last week, produced by JPMorgan equity analysts.
But increasingly little of its Trump bump remains. SoFi is now hanging on to just single-digit gains since America opted for Trump 2.0.
