From theBearCave: Muddy Waters Research published on SoFi Technologies (NASDAQ: SOFI — $21.6 billion), a digital banking app. Muddy Waters called SoFi “a financial engineering treadmill” with “GE Capital-style marks, Enron-esque off-balance-sheet structures, and relentless dilution.” Muddy Waters alleged SoFi understates personal-loan losses by selling delinquent loans just before charge-off and moving troubled loans off balance sheet, which in turn inflates fair-value marks and adjusted EBITDA. Muddy Waters said that after adjusting for inflated marks, off-balance-sheet borrowings, and capitalized expenses, it reduced 2025 Adjusted EBITDA by ~90%.
In response, SoFi said it “[intends] to explore potential legal action against Muddy Waters for the factually inaccurate and misleading report.” Muddy Waters retorted that SoFi “has still not engaged with any specific allegation in our report.”
Muddy Waters Research published on SoFi Technologies (NASDAQ: SOFI — $21.6 billion), a digital banking app. Muddy Waters called SoFi “a financial engineering treadmill” with “GE Capital-style marks, Enron-esque off-balance-sheet structures, and relentless dilution.” Muddy Waters alleged SoFi understates personal-loan losses by selling delinquent loans just before charge-off and moving troubled loans off balance sheet, which in turn inflates fair-value marks and adjusted EBITDA. Muddy Waters said that after adjusting for inflated marks, off-balance-sheet borrowings, and capitalized expenses, it reduced 2025 Adjusted EBITDA by ~90%.
In response, SoFi said it “[intends] to explore potential legal action against Muddy Waters for the factually inaccurate and misleading report.” Muddy Waters retorted that SoFi “has still not engaged with any specific allegation in our report.”