Short Selling SoFi: Muddy Waters Uncovers Accounting Issues and Off-Balance-Sheet Transactions

Muddy Waters Research published a 28-page short report on SoFi, accusing the digital bank of improper accounting practices, financial engineering, and off-balance-sheet transactions that distort its actual performance. The report focuses on SoFi's fair value marks, which Muddy Waters claims are incorrectly calculated, making EBITDA look better than it really is. SoFi generates most of its revenue from lending, particularly personal unsecured loans, which it sells directly to investors.