Why Does SoftBank Keep Selling SOFI Stock?


  • SoftBank (SFTBY) sold 18.22 million shares of SoFi (SOFI) on Aug. 16.
  • The conglomerate has now sold 49.85 million shares this month.
  • Shares of SOFI stock are down more than 50% year-to-date.
SOFI stock - Why Does SoftBank Keep Selling SOFI Stock?

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SoFi (NASDAQ:SOFI) stock is in the spotlight after SoftBank (OTCMKTS:SFTBY) sold shares of the company for the third time this month. In the month of August, the multinational conglomerate has now sold off a total of 49.85 million shares, reducing its stake by 52%. The recent sale saw SoftBank sell 18.22  million shares on Aug. 16. After the sale, the firm now owns 45.42 million shares, equivalent to a 4.9% stake. In addition, SoftBank’s stake has now fallen below the 5% threshold that requires filers to file a 13D or 13G form. As a result, the conglomerate is not required to disclose any further sales of SOFI stock.

SoftBank’s first sale of SOFI was on Aug. 5. Since then, shares of the company have declined by about 15% as the stock struggles to find a price floor. What’s more, SoftBank hinted after its first sale that it may “sell some or all of their holdings of Shares of the Issuer [SoFi] in the open market.” So, why exactly is the firm selling out?

Why Does SoftBank Keep Selling SOFI Stock?

SoFi isn’t the only company SoftBank has sold. SoftBank also parted ways with Uber (NYSE:UBER) and Opendoor (NASDAQ:OPEN) for a gain of $5.6 billion.

SoftBank isn’t selling its stake in SoFi because of a lack of conviction. During Q2, the company reported a record loss of $23.4 billion as the value of its investments — both public and private — experienced major drawdowns. As a result, CEO Masayoshi Son explained that his company is taking a defensive stance in order to continue company operations. He explained, “Our vision remains the same, our beliefs remain the same. But we know we have to reduce operational costs, including headcount. For new investments, we have to be more selective.”

Meanwhile, SoFi reported strong Q2 earnings results, despite rising rates, inflation and the student loan moratorium. Revenue tallied in at $356 million, beating the consensus analyst estimate of $340.8 million by a healthy 4.5%.

Furthermore, the company raised full-year guidance for both adjusted net revenue and earnings before interest, taxes, deductions and amortizations (EBITDA). Full-year revenue is now expected to be between $1.508 billion and $1.513 billion, up from the previous guidance of between $1.505 billion and $1.51 billion. The company now expects EBITDA to be between $104 million and $109 million, up from previous guidance of between $100 million and $105 million.

On the date of publication, Eddie Pan did not hold (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.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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