SoFi Technologies Plunges 5.8% – What’s Behind the Sudden Selloff?

Summary
• SOFI stock drops 5.8% to $21.27, extending its intraday low to $20.60
• Q2 revenue beats estimates by 44%, with EPS surging 700% year-over-year
• $1.5 billion secondary offering priced at $20.85 per share sparks dilution fears

SoFi Technologies (SOFI) faces a sharp selloff despite outperforming earnings expectations and raising full-year guidance. The fintech giant’s stock has plunged 5.8% as of 7:28 PM ET, driven by concerns over a $1.5 billion equity offering that dilutes existing shareholders. While the company’s Q2 results highlighted 44% revenue growth and 34% member expansion, the aggressive capital raise has triggered a reevaluation of its valuation and growth trajectory.

Dilution Concerns Overshadow Strong Earnings Beat
The selloff stems from SoFi’s $1.5 billion secondary offering, announced on July 31, 2025, which priced 71.9 million shares at $20.85 each. While the offering aims to fund growth in its loan platform and crypto initiatives, investors reacted negatively to the 7.1% increase in shares outstanding. This dilution risk has overshadowed the company’s Q2 achievements: 44% revenue growth, a 30% rise in lending segment revenue, and 850,000 new members added. Analysts at Needham raised their price target to $25, but the market remains skeptical, pricing in a 3.5x price-to-sales multiple—below peers like PayPal (PYPL) and Block (SQ).

Bearish Plays with High Leverage: SOFI Put Options and SOFX ETF Analysis
• 200-day average: 14.72 (below current price)
• RSI: 60.65 (neutral)
• MACD: 1.35 (bullish divergence)
• Bollinger Bands: Lower bound at $19.13, current price at $21.27

Key levels to watch: $21.10 (30D support), $14.72 (200D average). Short-term bearish momentum is evident, with SOFI trading below its 52-week high of $25.11. The Defiance Daily Target 2X Long SOFI ETF (SOFX) has plummeted 11.5% today, reflecting aggressive shorting. For leveraged exposure, two put options stand out:

• SOFI20250808P20.5
- Put option with $20.5 strike, expiring August 8
- IV: 57.25% (mid-range)
- Leverage ratio: 54.46% (high)
- Delta: -0.3188 (moderate sensitivity)
- Theta: -0.00105 (low time decay)
- Gamma: 0.1984 (high sensitivity to price swings)
- Turnover: $430k (liquid)
- Payoff at 5% downside (20.21): $0.29 per share
- This contract offers a balance of leverage and liquidity for a moderate bearish move.

• SOFI20250815P21
- Put option with $21 strike, expiring August 15
- IV: 55.79% (reasonable)
- Leverage ratio: 25.90% (moderate)
- Delta: -0.4317 (high sensitivity)
- Theta: -0.002375 (low time decay)
- Gamma: 0.1636 (solid sensitivity)
- Turnover: $760k (highly liquid)
- Payoff at 5% downside (20.21): $0.79 per share
- Ideal for a larger downtrend, with strong gamma to capitalize on volatility.

Aggressive short-sellers may consider SOFI20250815P21 into a break below $21.10, while SOFX’s -11.5% move underscores leveraged ETF risks in this scenario.

Backtest SoFi Technologies Stock Performance
The performance of SOFI after a -6% intraday plunge has historically shown mixed results. While the 3-day win rate is 52.57%, the 10-day win rate is slightly lower at 51.05%, and the 30-day win rate is 49.71%. This suggests that SOFI tends to recover moderately in the short term, but the returns are not consistently positive across all time frames.

Act Fast: SoFi’s Downtrend Could Test $19.13 Support
The selloff in SOFI reflects a short-term repricing of dilution risks, but the stock’s 44% revenue growth and 30% lending segment expansion suggest resilience. Watch for a breakdown below $21.10 (30D support) or a rebound above $21.76 (intraday high). For context, sector leader PayPal (PYPL) is down 2.76%, highlighting broader fintech volatility. Investors should prioritize SOFI20250815P21 if the downtrend continues, while long-term bulls may re-enter near $19.13. Immediate action: Monitor the 52-week low of $6.01 as a final floor.