Finance company SoFi Technologies’ (SOFI) shares gained after the company reported better-than-expected earnings in the third quarter. But can the stock’s price continue its advance even as the student lending environment remains depressed? Read on.San Francisco-based digital financial services company SoFi Technologies, Inc.’s (SOFI) shares climbed more than 12% in price after the company made its stock market debut on June 1, 2021, which was facilitated by a merger with a special purpose acquisition company named Social Capital Hedosophia Corp V. The stock also advanced after the company reported its third-quarter earnings on November 10. Its total net revenue increased 35.5% year-over-year to $272 million in the quarter, while its net loss came in at $30.05 million compared to $42.88 million in the year-ago period. Since its public debut, the stock has lost 4.3% in price to close yesterday’s trading session at $21.67.
SOFI faces intense competition from other players in the finance space, such as Ally Financial Inc. (NYSE:ALLY) and Synchrony Financial (NYSE:SYF). In March, SOFI announced its plans to acquire Golden Pacific Bancorp and the bank charter that comes with it. That would allow the bank to gather cheap deposits and originate loans without involving a third-party bank. This could function as a catalyst for its growth.
However, according to a Business Journals report, a Golden Pacific Bancorp director has filed suit over the Sofi acquisition. If the court finds the shares of Golden Pacific Bancorp were not lawfully obtained, the plaintiff could block the acquisition altogether. So, the stock’s near-term prospects look bleak.