SoFi shares slipped Thursday as it addressed the Biden administration’s recent extension of the student loan moratorium. The federal government’s relief program has battered the personal finance company’s student loan refinancing business operations, which have operated at 50% of their pre-COVID levels.
The company’s adjusted projection for 2022 marks a 6% decrease in net revenue and a 44% decrease in earnings before interest, taxes, depreciation, and amortization (EBITDA). SoFi did not change its guidance for the first quarter of 2022, a move that could somewhat reassure investors.
Shares of SoFi were down more than 8% Thursday in midday trading, and have tumbled more than 48% since the start of the year.
Originally set to expire in May, the pandemic-era relief program will now run until August 31, marking the sixth extension of the program since it began in March 2020. SoFi has maintained its expectation that the Biden administration will extend the program through the 2022 calendar year, and adjusted its predictions accordingly. Even with possible seventh and eighth extensions of the moratorium through 2022, SoFi’s “guidance represents approximately 45% year-over-year Adjusted Net Revenue growth to $1.47 billion, a tripling of Adjusted EBITDA to $100 million, and a doubling of margins.”
The pandemic-era policy has now spanned two presidential administrations and has had a noticeable impact on SoFi’s core business operations. SoFi’s reassessment of its future viability is evidence that some federal policies will certainly outlast the immediacy of the public health crisis.
The post SoFi stock tumbles again as Biden extends pause on federal student loan payments appeared first on Fast Company.Last Update: Thu, 07 Apr 22 16:00:02