SoFi Stock Short Interest Builds: Muddy Waters Says Firm 'Stonewalled' 11 Questions Amid Transparency Concerns

• Muddy Waters said SoFi answered “zero” of 11 investor questions submitted ahead of its short report.
• The update follows earlier allegations of at least $312M in unrecorded debt and claims of “Enron-esque” off-balance-sheet structures, which SoFi denied.
• CEO Anthony Noto bought about $500K of shares after the short report, increasing his holdings to roughly 11.7 million shares.

Shares of SoFi Technologies Inc. (SOFI) fell nearly 2% in overnight trading early Monday amid rising short interest after Muddy Waters Research said the company “stonewalled” 11 investor questions ahead of its short report, raising fresh transparency concerns.

SOFI stock posted its fifth straight session of losses on Friday, sliding over 1% to finish at $16.9.

Muddy Waters Presses SoFi Over 11 Investor Questions

Short interest in SoFi rose to 10.1% between March 13 and March 23, the highest level since August 2025, when bearish positioning stood near 11.25%, according to Koyfin data.

The rise in bear bets is still below record levels reached in April 2024, when the fintech firm said its tech platform and financial services segments were expected to increase their share of adjusted net revenue over time. 

In a follow-up note to its earlier short report alleging accounting issues, including at least $312 million in unrecorded debt, Muddy Waters said SoFi had “answered zero” of the 11 questions it submitted to the company ahead of publication.

The short seller said it had engaged with SoFi’s investor relations team for several months before publishing its thesis and ultimately sent a detailed list of questions to management in early March covering loan-sale structures, servicing-rights accounting, and risk-retention treatment across securitizations. “SOFI’s response was a press release that did not address a single factual claim,” the firm said.

Short Seller Flags Institutional Access Concerns

Alongside the update, Muddy Waters said it had heard from institutional market participants that SoFi “regularly stonewalls on hard questions.” The short seller also pointed to SoFi’s comparatively lower institutional ownership levels than those of consumer-lending peers, saying the pattern of engagement raised broader transparency concerns.

“Retail investors would be well served to insist on transparency,” Muddy Waters said in the fresh note. The firm also said engagement with SoFi’s investor relations team was later abruptly discontinued after earlier discussions related to accounting treatment and secured-loan program structures.

Muddy Waters Calls SoFi A ‘Financial Engineering Treadmill’

The follow-up note builds on Muddy Waters’ earlier short report, which alleged SoFi may have a material misstatement of at least $312 million of unrecorded debt and raised concerns around loan-sale treatment, charge-off reporting, servicing-rights valuation and fair-value accounting.

The report called SoFi a “financial engineering treadmill” and alleged the company used “Enron-esque off-balance-sheet structures that disguise borrowings as revenue.” Muddy Waters said that if its conclusions were correct, the issues could indicate broader misstatements across financial metrics.

SoFi has rejected Muddy Waters’ allegations, saying the report reflects “a fundamental lack of understanding” of its financial statements and business.

The company said its financial statements are prepared in accordance with U.S. GAAP and SEC rules and supported by internal controls and procedures, adding that it intends to explore potential legal action over what it described as a “factually inaccurate and misleading report.”

SoFi CEO Buys Stock After Short Seller Report

Amid the selloff following publication of the short report, CEO Anthony Noto purchased 28,900 shares of SoFi stock at prices around $17 per share, valued at $500,000, according to a regulatory filing. Following the purchase, Noto owned about 11.7 million shares of the company.

Muddy Waters noted separately that the purchase represented “roughly 0.86% of the $58.3 million” it estimates Noto and CFO Chris Lapointe had previously realized through prepaid variable forward contracts tied to share sales.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment for SOFI was ‘bullish’ amid ‘high’ message volume.

One user said, “Sofi is undervalued at today's price. So unless the world blows up, you're getting this at a great price right now.”

Another user said, “MW doubling down on another report after being threatened by a lawsuit is a bit concerning tbh.”

SOFI stock has risen 34% over the past year.

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