On Tuesday, SoFi Technologies (SOFI, Financial) experienced a sharp decline in its stock, falling more than 8% to $10.20 following a strong monthly increase of 42% at one point. The third-quarter financial report revealed a decrease in the company's bad debt rate to 3.52%, down from 3.84% in the previous quarter. In an effort to manage its portfolio, SoFi sold off severely overdue loans. However, without these sales, the annualized net charge-off rate would still be around 5.0%, compared to 5.4% in the prior quarter.
Analysts pointed out that the report highlighted the momentum in loan demand and improvements in credit performance. However, these positive developments may have already been anticipated by investors, as evidenced by the stock's robust performance leading up to the earnings release.
