shares of sofi technologies inc were sliding 5 in monday trading after a wedbush analyst turned bearish on the name wedbush’s david chiaverini has concerns about sofi’s stock sofi given a lull in loan sales during the most recent quarter which prompted sofi to “lean on internal modeling assumptions” to get its fairvalue marks he says instead of “using marketderived marks from actual loan sales” further the company sold minimal personal and student loans in the prior quarter he noted “we fear that if sofi were to sell loans it may not achieve the same level of gain on sale margins that were generated in 3q and 4q of 104 cents on the dollar” chiaverini wrote as he cut his rating on sofi’s stock to underperform from neutral and slashed his price target in half to 250 while he doesn’t expect that sofi will change its accounting methodology or bring down its fairvalue assumptions in the immediate term he does wonder if regulators will ask sofi to operate with a more conservative lens toward capital requirements “that contemplates a hypothetical switch to cecl current expected credit losses accounting given sofi is comfortable holding loans to maturity rather than selling them” “we expect regulatory scrutiny on capital ratios and stress testing to intensify” in the wake of the silicon valley bank and first republic collapses sofi says it marks loans to fair value each month using factors both specific to the company and related to the economy in order to reflect expected sale prices at a given time once fairvalue accounting treatment is chosen at the time a loan is originated the company doesn’t have the option to change its cost accounting to include a cecl provision it says the company works with a thirdparty valuation specialist and also has its fairvalue marks audited by a third party additionally chiaverini worries that sofi may be nearing the “upper limit” when it comes to marketshare pickups in the personallending market “achieving critical mass in the personalloan segment could lead to a plateauing of quarterly personal loan originations at some point in 2023 given sofi’s market share has increased to 82 from 55 a year ago” and that management has expressed a plan to be prudent in how it approaches this part of the business the downgrade comes after a truist securities analyst initiated coverage of sofi shares with a bullish rating late last week see more sofi’s stock is poised to benefit from ‘powerful demographic shift’ a new bull says