Investors have been bidding on SoFi stock all year. Now they’re backing down

SoFi has been on a winning streak. Today takes his breath away.

Shares of SoFi Technologies (SOFI), the fintech-turned-bank, took a hit after a $1.5 billion stock sale announcement on Thursday surprised investors and analysts. The latest capital increase was the second in six months. However, its stock remains high, having nearly doubled so far this year.

The company has been on a high note over the past two years, with seven of its last eight quarterly reports beating analysts’ earnings expectations, according to Visible Alpha. The company plans to invest in its existing business, relaunch cryptocurrency trading, and expand its product offerings – good reasons to have cash in hand.

SoFi’s second capital raise in two quarters was not widely expected. Tim Switzer, an analyst at Keefe, Bruyette & Woods, said in a recent note that he was “a little surprised” that the latest stock selloff followed another for the same amount in July. However, the company’s capital levels are low compared to its banking counterparts, according to Switzer.

“We believe the increase is largely opportunistic given the stock is near all-time highs,” Switzer wrote yesterday.

The company priced shares at $27.50 per share, just below its all-time high in November of nearly $32. Visible Alpha’s Street consensus target is just under $26, which is perhaps an indication that the company has managed to achieve a good price — although the Street’s outlook for the stock, based on ratings, is broadly neutral. Shares closed down 6% at $27.78.

SoFi started out as a fintech company that primarily offered student loan refinancing, but has since transformed into a full-service bank offering bank accounts, personal loans, and investment products. It also relaunched its cryptocurrency trading platform last month after pausing that service in 2023 as it worked to secure its national bank charter. SoFi plans to launch its own branded stablecoin next year, according to the company.

“More events are happening at SoFi today than at any other time in my eight years with the company,” Anthony Noto, SoFi’s president, said on a third-quarter earnings call in late October.

SoFi announced a stock sale scheduled to close on December 8. A previous version of this article incorrectly stated that the sale had already taken place. This article has also been updated to reflect stock closing prices.