Why is SoftBank continuing to sell SOFI shares?

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SoFi (NASDAQ:SOFI) the stock is in the spotlight after Soft Bank (OTCMKTS:SFTBY) sold shares of the company for the third time this month. In August, the multinational conglomerate has now sold a total of 49.85 million shares, reducing its stake by 52%. The recent sale saw SoftBank sell 18.22 million shares on August 16. After the sale, the company now owns 45.42 million shares, equivalent to a 4.9% stake. Additionally, SoftBank’s stake has now fallen below the 5% threshold that requires filers to file a Form 13D or 13G. Accordingly, the conglomerate is not required to disclose further sales of SOFI shares.

The first sale of SOFI by SoftBank took place on August 5. Since then, shares of the company have fallen around 15% as the stock struggles to find a bottom. Additionally, SoftBank hinted after its first sale that it may “sell some or all of their holdings of issuer stock. [SoFi] on the free market. So why exactly is the business selling out?

Why is SoftBank continuing to sell SOFI shares?

SoFi isn’t the only company SoftBank has sold. SoftBank also parted ways with Uber (NYSE:UBER) and open door (NASDAQ:OPEN) for a gain of $5.6 billion.

SoftBank is not selling its stake in SoFi due to lack of conviction. During the second quarter, the company posted a record loss of $23.4 billion as the value of its investments, both public and private, suffered significant declines. As a result, CEO Masayoshi Son explained that his company is taking a defensive stance in order to continue its operations. He explained, “Our vision remains the same, our beliefs remain the same. But we know we need to reduce operational costs, including headcount. For new investments, we must be more selective.

Meanwhile, SoFi reported strong second quarter results, despite rising rates, inflation and the student loan moratorium. Revenue reached $356 million, beating analysts’ consensus estimate of $340.8 million by 4.5%.

Additionally, the company raised its full-year guidance for both adjusted net revenue and earnings before interest, taxes, deductions, and amortization (EBITDA). Annual revenue is now expected to be between $1.508 billion and $1.513 billion, up from the previous forecast of $1.505 billion to $1.51 billion. The company now expects EBITDA to be between $104 million and $109 million, up from previous guidance of between $100 million and $105 million.

At the date of publication, Eddie Pan did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to Publication guidelines.


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