SoftBank Just Sold Off More SOFI Stock. Should You?

  • SoftBank (SFTBY) sold 19.56 million shares of SoFi Technologies (SOFI) stock on Aug. 9.
  • Month-to-date, the firm has now sold 31.62 million shares.
  • Shares of SOFI stock are down about 50% year-to-date (YTD).
SoFi headquarters. SOFI stock.
Source: Michael Vi / Shutterstock

SoFi Technologies (NASDAQ:SOFI) stock is in focus today after SoftBank (OTCMKTS:SFTBY) reported selling another 19.56 million shares. This sale occurred on Aug. 9 and was disclosed via an amended 13D filing, which the U.S. Securities and Exchange Commission (SEC) received yesterday. Additionally, the sale follows previous sales enacted on Aug. 5 and Aug. 8. SoftBank has sold a total of 31.62 million shares since Aug. 5.

Unlike the previous sales, SoftBank did not need to file a Form 4 in association with the transaction. This is because its stake fell below the 10% insider ownership threshold after the earlier sales. As a result, the prices SoftBank sold shares at were not required to be disclosed, although SOFI stock did close at $7.39 on Aug. 9.

So, why exactly did SoftBank cut its stake of SoFi again?

SOFI Stock: SoftBank Sells 31.62 Million Shares During August

After the sale, SoftBank still owns 63.65 million shares, which is equivalent to a 6.9% stake. The company doesn’t appear to have lost faith in SoFi Technologies, either. SoftBank CEO Masayoshi Son says the company is taking a defensive stance and scaling back on investments and operations after a record loss of $23.4 billion during the second quarter.

Son explained the following about the reasons behind the sales:

“Of course, the market was bad, there was a war, and there was the coronavirus. We can point to a lot of reasons, but these are all excuses. We have to self-reflect about the fact that if we’d been more selective and had invested more properly, it wouldn’t come to this.”

The CEO added that SoftBank will become more “selective” with its investments. In Q1, the firm reported a gain of about $22 billion. Essentially, all of those gains have been erased since then. In Q2, SoftBank invested about $600 million into opportunities, down from $20.6 billion a year ago.

SoFi Reports Q2 Earnings

Meanwhile, SoFi recently reported a stellar second quarter. For the period, adjusted revenue tallied in at $356 million, up 50% year-over-year (YOY) and beating the consensus analyst estimate of $340.8 million. Adjusted earnings per share (EPS) came to a loss of 12 cents as well, beating an expected loss of 14 cents.

In Q2, the company also raised full-year revenue guidance to between $1.508 billion and 1.513 billion, up from previous guidance for between $1.505 billion and 1.510 billion. Lastly, SoFi achieved its second-highest member and product growth during the quarter.

CEO Anthony Noto added the following about the results:

“The depth and breadth of our portfolio allows us to allocate resources toward the best growth opportunities across our diverse offerings, which has enabled us to exceed our performance targets despite continued headwinds in certain businesses.”

Shares of SOFI stock are up 3% as of this writing.

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 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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