SoFi Technologies (NASDAQ:SOFI) has been in the news for several reasons but SOFI stock hasn’t picked up much.
The stock is already down 64% year to date and is inching closer to the 52-week low of $4.82
The macroeconomic conditions haven’t spared anybody and SOFI stock is just another one to hit new lows each week. The stock was once trading as high as $24 last November but is at a low of $5 today.
I strongly believe in SoFi’s potential to change the fintech space and this year might be hard for the company but it is too soon to write it off. Here are two catalysts that will work in favor of SOFI stock.
Proposed Reverse Stock Split
SOFI stock has been in the news since a proxy statement by the company mentioned a reverse stock split.
July 12 will be an important day for the company when investors will vote on whether to grant SoFi the power to enact a reverse stock split or not. If the company receives approval, there could be a potential ratio of 1-for-2 or 1-for-10.
This is an obvious step to appeal to investors as SOFI approaches penny stock territory.
Whenever there is a reverse stock split, the stock price rises. This could be your chance to make the most of the gains. It will make the stock attractive to investors.
A rise in stock price can benefit a company in multiple ways. If you are holding SOFI stock, wait for the reverse stock split before you take home your gains.
All tech companies have suffered due to the tech sell-off and there is no particular reason behind the negative sentiment around the stock.
Due to the war, worries about inflation and interest rates, many stocks have taken a hit. In SOFI’s cse I like to look at it as a chance to enhance your position. Investors tend to look at the fundamentals of a company and SoFi has outdone itself there.
The company reported a revenue of $321.7 million in the latest quarter, better than expected by Wall Street. It reported a positive adjusted EBITDA for the straight seventh time and this is nothing but impressive. Even the number of members has been growing over the quarter and SoFi is consistently working towards giving them the right products and services.
After revising the forecast, the company still expects to make a revenue of around $280 to $285 million in the quarter.
The Bottom Line on SOFI Stock
SOFI stock might not be this cheap for a long time to come and if you have been contemplating taking a position, now is the time to do so.
The market is overreacting due to macroeconomic concerns and SOFI stock will bounce back in the long term. If the reverse stock split is approved, we could see a rise in the stock price but until then, hold your position.
On the date of publication, Vandita Jadeja 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.