Shares of SoFi Technologies (SOFI) plunged about 7% on Dec. 5 after the fintech announced a $1.5 billion convertible note offering, raising concerns of immediate dilution.
The sell-off pushed SOFI decisively below its 100-day moving average (MA) on Friday, indicating continued bearish momentum in the near to medium term.
Following today’s drop, SoFi stock is down nearly 16% from its recent high (November).
SOFI stock is in the red today primarily because convertible note offerings tend to dilute existing shareholders.
Still, long-term investors may consider buying the dip, as the company plans to use the earnings in part to “fund incremental growth and business opportunities.”
So, the outlook is certainly bleak in the short term, but in the long term, the capital raise may actually help accelerate growth, potentially unlocking significant additional upside for SoFi stock.
Investors should also note that this fintech stock has a history of starting the new year strong.
Over the last four years, it has risen a notable 22.50% on average in January, which is another compelling reason to buy SOFI for 2026.
Despite the dilution risk tied to SoFi’s convertible note offering, Mizuho senior analyst Dan Dolev continues to forecast a rise in the fintech stock to $31 over the next 12 months.
In his latest research note, Dolev struck a positive tone about the company’s re-entry into cryptocurrency trading and blockchain-enabled remittances this year.
According to him, SOFI stock will rise as the Nasdaq-listed company continues to expand its product suite, which could attract millions of new members to its diversified fintech platform in 2026.
That said, SoFi Technologies currently trades at a forward price-to-earnings (P/E) ratio of about 78 times, suggesting it’s not a cheap stock to own heading into the new year.
While SoFi is surely growing at a rapid pace and also remains committed to sustainable profitability, valuation risk and the 100-day MA hinting at continued bearish momentum warrant caution in initiating a new position in SOFI stock at current levels.