SoFi Stock Eyes Worst Quarter In 4 Years: Muddy Waters Returns With Fresh JPMorgan Deal Warning, Warns Of $1B EBITDA Risk

• Muddy Waters Research said the JPMorgan deal appears to have been booked as a sale instead of a borrowing.
• It warned the issue could lead to about $1B in EBITDA restatements and weaker capital ratios.
• The report builds on earlier claims of $312 million unrecorded debt and “Enron-esque” off-balance-sheet structures.

Shares of SoFi Technologies, Inc. (SOFI) are headed for their worst quarter in four years as Muddy Waters Research renewed scrutiny of a $312 million JPMorgan deal it says may have been booked incorrectly, flagging potential $1 billion EBITDA restatement risk.

SOFI stock slipped nearly 1% on Monday to its lowest level since June 2025, marking its fifth straight session of losses.

Muddy Waters Flags SoFi’s $312M JPMorgan Deal Risk

Muddy Waters said in a new report that SoFi “appears to have booked a $312 million loan from JPMorgan as if it were a sale,” adding the accounting treatment may have inflated reported profits and bonuses, while shareholders absorbed dilution.

The short seller said SoFi “apparently confirmed” the $312 million was not recorded as debt and instead was booked as a loan sale in the third quarter of 2024. However, it said Utah UCC filings contradict this treatment, indicating the transaction should be classified as a borrowing rather than a sale.

“We believe that when SOFI restates this borrowing, it will also restate ~$1 billion of previously reported EBITDA; and, its capital ratios will be restated materially lower,” the report said.

JPMorgan Role Raises SOFI Accounting Questions

According to Muddy Waters, transaction filings identify JPMorgan as “senior lender”, while a SoFi unit was designated borrower and assigned a security interest tied to the receivable.

The firm said this structure indicates that JPMorgan loaned money against the asset rather than purchased it, arguing that transfers between SoFi entities did not constitute a true third-party sale. “The only third party, JPMorgan Chase Bank, was clearly a lender,” the report said.

Muddy Waters said that because the Federal Reserve had cut rates 50 basis points shortly before the deal, the receivable “should have sold above par,” adding that lending at par was consistent with a financing structure rather than a negotiated asset sale.

The report added that SoFi has not publicly identified the buyer of the receivable or clarified where the facility appears in disclosures, saying that “there was no buyer, and the facility isn't recorded because SOFI booked a borrowing as a sale.”

Earlier SoFi Short Claims Add To Pressure

The fresh report builds on Muddy Waters’ claims from earlier this month that SoFi may have at least $312 million of unrecorded debt and used “Enron-esque off-balance-sheet structures that disguise borrowings as revenue.” Founder Carson Block also warned SoFi’s borrower base could be “ground zero” for AI-driven job disruption affecting up to 15% of knowledge workers.

However, SoFi rejected the allegations, calling them a “fundamental lack of understanding” of its disclosures and operations and said its reporting complies with U.S. GAAP and SEC standards. 

Meanwhile, Mizuho reaffirmed its ‘Outperform’ rating and $38 price target, citing sufficient clarity around the disputed transaction. CEO Anthony Noto also purchased 28,900 shares after the initial selloff, increasing his holdings to about 11.7 million shares.

How Do Retail Traders Feel About SOFI?

On Stocktwits, retail sentiment for SOFI slipped to ‘bearish’ over the past day from ‘neutral’ levels a week ago amid nearly an 800% surge in 24-hour message volume.

One user said, “so what I can gather is that a hedge fund is trying to convince loans are not bought and sold on a regular basis or that Sofi just isn’t doing it right. Seems pretty thin to me.”

Another user said, “Muddy still doing their best by posting narratives that they hope will help their short.”

SOFI stock has declined 42% year-to-date, but is up 28% over the past year.

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