• SoFi Technologies (SOFI) has gained back some ground in recent weeks.
• But the debate over student loan debt continues, as well as the interest-free pause.
• The company was out over skis valuation-wise and now looks more reasonable.

With everything going on the world right now, the student loan issue is now a second or third tier issue. But not to SoFi Technologies (NASDAQ:SOFI), one of the fintech pioneers in the student loan sector.

It has received significant funding from all the big venture capital firms and its visibility was huge. It even owns the naming rights to the stadium where the LA Rams and LA Chargers play.

SoFi also bought a bank, which means it can do a lot more than manage student loan portfolios. It can now offer accounts and services that traditional banks offer. All this has been very encouraging for investors that were sold on the “fintech revolution” stories and the massive money pumped into the sector.

But the economy shifted and the easy money started to dry up. Wall Street started to flash its “risk on” lights and all these small firms with massive market caps across various industries started to pay.

Now quality is the watchword.

And that means SOFI stock has been caught in this transition.

SoFi Stock: Smoke Vs. Fire

The trouble with all these investors laughing it up during the good times is that they get very dour when the good times end.

There are few truer sayings on Wall Street than, “everyone is a genius in a bull market.”

But now the rubber is hitting the road. “Boring” things like revenue, earnings and margins are now important again now that the easy money is drying up.

SOFI stock is actually a perfect example of a high-flyer that’s been caught in this mess. It could do no wrong and even now, it sports a nearly $6 billion market cap.

However, it also has more than 22% short interest hanging over it. That’s a lot people betting there’s more downside here.

Then again, if better economic reports come in over the next quarter, any rally could see a massive short squeeze boost the stock significantly. If you’re a trader, that might be a bet worth taking.

But what about investors?

Some Value But Some Risk, Too

The trouble with where we are right now is no one is sure how this all pans out. Remember when the central banks took over the global economy, everyone said this kind of effort had never been attempted before.

Well, now it’s over and no one knows how this is going to end either. We’re teetering on global recession or a second half global recovery. An economic recovery means SOFI stock should take off. If the economy sputters, SOFI stock’s short sellers will win the day.

If you’re an investor — not a trader — and have some risk capital you’re willing to put out there, SOFI stock is worth a small position now. Q2 earnings that beat expectations is what to look for, as well as positive guidance. Drop a few more dollars in if that happens.

Just be aware that we’re not going back to the way the market were anytime soon. We’ve moved beyond that, so don’t think buying the dip means you’ll be rolling in profits by November.

This is a great time to takes risks on quality beat up stocks and wait for your payoff years down the road.

On the date of publication, GS Early 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.