One of the big movers in today’s market happens to be retail investor favorite SoFi Technologies (NASDAQ:SOFI). This morning, shares of the fintech company soared more than 3% before moving lower alongside the broader market this afternoon. At last check, SOFI stock has trended down by about 2% on the day.
That said, it’s been an eventful few weeks for this digital financial services company.
From a macro perspective, bond yields have continued higher. Today, the benchmark 10-year U.S. Treasury bond breached the 3% level once again, spurring concern among some investors. Inflation remains persistently high, increasing the threat of a recession. And while higher rates are typically good for financial companies, due to higher net interest margins, an outright recession would dim the sector’s prospects for some time to come.
As a fintech company that’s not yet profitable, SoFi may be more prone to such risks — hence the recent selling pressure in SOFI stock. That said, let’s dive into a few catalysts investors may want to watch from here.
What to Watch With SOFI Stock
In addition to the increasingly negative macro backdrop, there are other headwinds investors are pricing in right now. There’s the fact that companies without real earnings are getting pushed to the side. And there’s also the issue of how long President Joe Biden’s student loan forgiveness program, which may give up to $10,000 of forgiveness to a select group of indebted individuals, will play into SoFi’s prospects.
This is a key factor investors are watching because student loan refinancing is a big portion of SoFi’s business model. Should federal student loan balances get taken down and some completely wiped out, SoFi’s target market will decrease. That’s an obvious negative.
On the bright side, there were reports last week of some insider buying activity for SOFI stock. CEO Anthony Noto reportedly bought more than 116,000 shares in May. In aggregate, he now owns roughly 3.3 million shares with a plan to buy more at these prices.
These shares are currently worth more than $22 million. With Noto signaling his intention to buy more shares, perhaps it’s time for bulls to get out their checkbooks and average down.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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