Future Investing
SOFI Stock Crashing On Wall Street's FAKE LOAN DATA!
10/1/2025, 6:02:52 PM
Economic Summary
- A Wall Street analyst (BTIG) published incorrect ABS delinquency figures for Upstart (UPST), initially stating ~11.2% 30+ day delinquencies; after correction the weighted 30-day delinquencies were around 6.2%, triggering a large but partially reversed sector selloff.
- The mistaken delinquency report caused broad short-term volatility across American lending fintechs (SoFi/SOFI, Upstart/UPST, Pagaya/PGY, LendingClub/LC), moving billions of dollars as institutional investors reacted to the data.
- Fundamental differentiation matters: SoFi (SOFI) serves higher-income, higher-FICO borrowers (avg income ~$161k, FICO ~743) with low on-balance 90-day delinquency (42 basis points), whereas Upstart (UPST) focuses more on lower-credit cohorts, so macro credit improvements or deterioration affect them differently.
Bullish
- SoFi's borrower mix is high quality (avg income $161k, FICO ~743), implying lower credit risk.
- SoFi Q3 user metrics (website traffic, app downloads) improved, suggesting potential member growth.
- BTIG/Upstart data was corrected, prompting rebounds — suggesting the selloff was partly an overreaction.
- SoFi rolled out level-one options on its Invest platform, expanding product functionality.
Bearish
- Sector contagion from a flawed delinquency report caused sharp share declines across fintech lenders.
- Upstart showed signs of underwriting stress in ABS delinquency data (initially reported very high).
- Leadership change at Galileo creates execution and integration uncertainty for SoFi.
Bullish tickers
SOFIPGY
Bearish tickers
UPSTLCGALILEO
SOFI
Bullish
High-quality borrower base (avg income $161k, FICO ~743), improving app/download metrics, low 90-day delinquency (42 bps), and level-one options rollout.
Bearish
Caught in sector-wide selloff after erroneous Upstart delinquency report; potential sentiment and execution risks (Galileo leadership change).
UPST
Bullish
BTIG data correction reduced the severity of the signal; company says rising borrower credit quality can improve outcomes.
Bearish
ABS report initially signaled accelerating delinquencies and underwriting stress among lower-credit borrowers.
PGY
Bullish
Shares rebounded after the delinquency data was corrected, suggesting an overreaction by markets.
Bearish
Part of the broader fintech decline tied to reported delinquency concerns and lending-cycle exposure.
LC
Bullish
Also saw partial recovery after the underlying data was corrected, indicating stress may have been overstated.
Bearish
Experienced sharp downdraft amid the sector-wide reaction to delinquency reporting.
GALILEO
Bullish
As a SoFi-owned tech platform, Galileo remains strategically valuable to product rollouts (e.g., options on Invest).
Bearish
Leadership change (Derek White removed; Bill Kennedy interim) could create operational or integration uncertainty for SoFi.
People mentioned
Anthony NotoDerek WhiteBill Kennedy