Why Are People Selling Their SOFI Shares?

By Susan Ramirez • Tuesday, October 03 15:25 • Permanent Link

One of the standouts of today's afternoon trading session has been SoFi Technologies, which logged a -8.1% drop and underperformed the S&P 500 by -7.0%. The Closed End Fund stock is now trading at $7.21 per share and is -30.12% below its average target price of $10.31. Analysts have set target prices ranging from $3.0 to 16.0 dollars per share, and have given the stock an average rating of hold.

SoFi Technologies's short interest can give us an idea of what future price movements the market expects from the stock. The short interest is the percentage of shares that are tied up in short positions, which will provide gains to the investor only if the stock price falls. The stock's short interest is 11.6% which seems to indicate a mixed sentiment on SOFI TECHNOLOGIES

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

We can make inferences about the market sentiment surrounding SoFi Technologies by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.

At 35.5%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.

Overall, there is mixed market sentiment towards SoFi Technologies because of an analyst consensus of strong upside potential, a hold rating, an above average percentage of its shares sold short, and only a small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.

At a glance, here are some essential statistics you may want to know about SOFI:

It has trailing 12 month earnings per share (EPS) of $-0.25 per share
SoFi Technologies has a trailing 12 month Price to Earnings (P/E) ratio of -28.8 while the S&P 500 average is 15.97
The company has a Price to Book (P/B) ratio of 1.3 in contrast to the S&P 500's average ratio of 2.95
SoFi Technologies is a Finance company, and the sector average P/E and P/B ratios are 14.34 and 1.57 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.