SoFi (NASDAQ:SOFI) CEO Anthony Noto has shown heavy conviction in his company, purchasing more than 300,000 shares this year. These purchases have come amid regional banking fears and an outflow of banking deposits. However, a recent transaction by Chief Technology Office (CTO) Jeremy Rishel has reversed the trend of insider buys.
On May 9, Rishel disclosed selling 200,000 shares at an average price of $5.46. In total, the transaction was worth $1.09 million. Following the sale, Rishel still owns 101,582 shares. That means the sale consisted of a significant 66.31% of his prior stake.
CTO Jeremy Rishel Sells 200,000 Shares of SOFI Stock
This wasn’t Rishel’s first open market interaction with SOFI stock this year. On March 8, the executive disclosed selling 81,000 shares at an average price of $6.46. The reason for these sales are unclear, as insiders are not required to disclose why they sell or buy. As renowned investor Peter Lynch notes, however, insiders may sell shares for a variety of reasons but they only buy for one: They believe the price will go up.
Still, Rishel’s sale breaks the SOFI streak of insider buys set by CEO Anthony Noto. In the past year, insiders in aggregate have purchased $11.71 million of shares and have sold $101.10 million worth of shares.
SoFi’s First-Quarter Earnings Top Analyst Estimates
SoFi reported first-quarter earnings earlier this month, beating analyst estimates on both revenue and earnings. For the period, revenue was $460.6 million compared to the estimate for $441 million. Meanwhile, EPS was a loss of 5 cents, beating the estimate for a loss of 7 cents. A point of concern, however, was a lack of loans sales.
“We believe that SOFI not selling loans in 1Q could imply that gain on sale margins aren’t trending at similar elevated levels to those generated last year or that the market for loans may have weakened,” said Wedbush analyst David Chiaverini.
Today, Truist analyst Andrew Jeffrey initiated coverage of SOFI stock with a “buy” rating and $8 price target. The analyst characterized SoFi as “the future of US banking.” Jeffrey believes that SoFi offers improvements compared to traditional banks, such as an easy-to-use app and fast loan decisions. He also believes the outflow from legacy banks will benefit the company.
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.