Muddy Waters is short SOFI. SOFI's management appears to have booked a $312 million loan from JPMorgan as if it were a sale — inflating reported profits and their own bonuses while shareholders bear ~15% annual dilution. Utah UCC filings contradict SOFI's accounting, suggesting SOFI needs to restate this transaction. The restatement should be much larger than just $312 million: when SOFI restates this borrowing, it will also restate ~$1 billion of previously reported EBITDA, and its capital ratios will be restated materially lower.
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The Core Allegation
SoFi Technologies appears to have booked a $312 million loan from JPMorgan as if it were a sale, inflating reported profits and triggering executive bonuses while shareholders bear approximately 15% annual dilution.
The Evidence
In Muddy Waters' first report on SOFI, the firm highlighted unrecorded borrowings of $312 million. SOFI has since apparently confirmed that:
- The $312 million is not on the balance sheet as debt
- SOFI booked it as a loan sale in Q3 2024
However, Utah UCC filings contradict this accounting, leading Muddy Waters to believe SOFI needs to restate this transaction.
The Cascading Impact
The restatement should be much larger than just the $312 million:
- ~$1 billion of previously reported EBITDA will need to be restated
- Capital ratios will be restated materially lower
- Executive bonuses tied to inflated profits should be clawed back
Shareholder Dilution
While management profits from inflated earnings, shareholders bear approximately 15% annual dilution — a misalignment that sits at the heart of the thesis.
subsequent events
- Q3 2024SOFI books $312M JPMorgan loan as a sale
“SOFI has apparently confirmed that the $312 million is not on the balance sheet as debt, and SOFI booked it as a loan sale in Q3 2024.”
- 2026-03-30Muddy Waters publishes follow-up report
“Utah UCC filings contradict this accounting, leading us to believe that SOFI needs to restate this transaction.”
Source — https://muddywatersresearch.com/research/2026/mw-sofi-borrowingsales-0330/
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