SoFi ‘confirms fears’ of loss sharing component to recent deals, says Wedbush

After SoFi Technologies presented at a competitor’s conference, Wedbush said the company “confirmed what many investors were fearing/assuming” by acknowledging that there’s a loss sharing component to the recently announced loan sale transactions. The company mentioned that the loss sharing is “capped,” but didn’t provide at what level to which the losses are capped on the forward flow sales, according to the analyst, who fears that as more of these deals are executed that SoFi may be subject to loss risk on both its own balance sheet loans as well as owning a portion of risk from off-balance sheet loans that it has sold to third parties. The firm reiterates an Underperform rating and $3 price target on SoFi shares.