Typically, when a publicly traded company loses nearly 16% of market value over the trailing month, there’s a reason for it — and usually not a good one. That’s the situation with SoFi Technologies (NASDAQ:SOFI). Though backed by several relevant innovations like fintech and cryptocurrencies, investors currently have a dim view of SOFI stock.

Sure, the market has recently regained some composure, setting in place the argument that contrarians should load up on the discounts for the next leg up.

Over the week ending Feb. 4, SOFI stock gained slightly over 6%. Still, the major investment indices are down for the year, putting the fintech specialist in a bit of a quandary.

Nevertheless, I can appreciate why some people take the optimistic view on SOFI stock. A few weeks ago, the company received regulatory clearance to become a bank holding company. At the time, SoFi CEO Anthony Noto stated that “This incredible milestone elevates our ability to help even more people gettheir [sic] money right and realize their ambitions.”

Noto added that with a national bank charter, SoFi can lend to its clients at even more competitive interest rates and provide high-yielding interest in checking and savings accounts, enhancing the firm’s overall product/services portfolio.

Just as significantly if not more so is that the fintech specialist arrives in the banking scene with a clean slate. With some of the big banks still working through a legacy portfolio of bad assets stemming from the events leading up to and including the Great Recession, SOFI stock looks more appealing on a long-term basis.

Let’s not kid ourselves: the banking upstart has its work cut out for it. But it’s engaging the necessary work without the anchor of legacy problems.

Economic Concerns Potentially Await SOFI Stock

While an exciting development filled with potential, it’s difficult to ignore the market’s reaction to SOFI stock. Upon the bank charter news, shares popped higher as you would expect them too. But the spike up only lasted one session. Since then, it’s been a series of crimson-inked trades.

Although I’m not going to speak to the intentions of those dumping SOFI stock, I suspect that economic dynamics may weigh heavily on sentiment. Particularly, the Federal Reserve, which previously signaled a pivot toward a hawkish monetary policy, now has an even bigger reason to pop various asset bubbles.

Enter the better-than-expected jobs report for January 2022. According to CNN Business, “Even as inflation, partly fueled by the Fed’s easy-money policies, soared to nearly 40-year highs, the Fed has kept its foot on the gas, wagering that the risk of higher inflation was more tolerable than the risk of careening back into recession.”

But now, CNN states, “it’s hard to imagine a better time to start tapping the brakes. The Fed has signaled it’s likely to raise interest rates in March, followed by several more increases throughout the year, to help bring inflation down. Given the strong labor market and solid consumer spending, it’s increasingly clear the economy can handle it.”

True, a strong jobs report is a net positive. However, the rising rates may spell trouble for SoFi’s loan origination and sales revenue, which generated $142.1 million in the third quarter of 2021, up 37% against the year-ago level. Simply put, consumers and entrepreneurs may be unwilling to borrow as much money.

As well, I’m concerned about the delinquency rate on single-family residential mortgages. It was spiking higher for most of 2020 until the government stepped in. What happens when it steps out?

The Bottom Line

Another factor that keeps me leery about SOFI stock is how it went public. As you know, SoFi entered a reverse merger with Social Capital Hedosophia Holdings V, a special purpose acquisition company(SPAC) under Chamath Palihapitiya.

To me, that’s a double whammy. Frankly, SPACs have underperformed benchmark indices post-business combination. Not to pile on but Palihapitiya-sponsored SPACs seem to really stink up the joint. He has the Midas touch for shell companies, except that rather than turning into gold, they turn into the other four-letter word.

I’m honestly a bit surprised that there hasn’t been more of an uproar about the blank-check “opportunities” that the early Facebook executive has brought to market. I suppose toxic positivity prevents people from speaking out about genuine grievances. Whatever the case, I’m not eager to put my money into the mix.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.