$SoFi Technologies Inc.(SOFI)$
a rates shock, a short-seller dispute, and why my trend gate stops the trade
SoFi fell 6.7% on 14 Oct to $14.22, a new 52-week low, on about 91M shares, roughly double normal volume. September inflation came in hotter than forecast and pushed yields up. Robinhood fell 8.5%, Affirm about 9.5% and the S&P 500 1.1%, so it was a sector move. The stock is now 56.6% below its 52-week high of $32.73.
The business is still growing fast. Q2 GAAP net revenue was $1.218B, up 43%, and net income was $156.6M, up 61%. Deposits are $45.5B, up $5.3B in the quarter, and members are 15.8M. The personal-loan charge-off rate fell to 3.7% from 4.5%. The stock trades at 1.95× tangible book.
Two things weigh on it. SoFi carries much of its loan book at fair value, so rising yields cut the fair value of fixed-rate loans, and that runs through earnings and capital. Separately, Muddy Waters has been short since 17 March and alleges accounting problems. SoFi calls the claims inaccurate and says its accounting complies with GAAP. I haven't found a restatement or enforcement action, though a 21 Jul report says the SEC asked for more disclosure on the secured lending programme. I take no view on the allegations. They come from a party that profits if the stock falls, but they're specific and repeated, so I score the accounting risk lower and size smaller.
My scorecard gives it 60/100.
My sell-put gates at $14.22:
Legal and news: pass, the short reports fall outside my 30-day window.
200-day SMA ($18.49): fail, the stock is 23.1% below it.
20 EMA: fail, price is below a falling 20 EMA near $15.95.
Volatility: fail. IVR is 23 and IVP 29, below my 40/45 minimums. That reading is from 12 Oct, before the drop.
Earnings: fail. Q3 results are confirmed for 27 Oct, 7am ET.
Size isn't the issue, since a $12.50 strike is only $1,250 a contract. The trend is. Reclaiming the 200-day takes about +30%, so I don't see a realistic put window in November. On 27 Oct I'll read the fair-value marks and capital ratios first, then revenue and EPS.
Personal framework, not investment advice.
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