SoFi Technologies Inc. (SOFI) Refutes $312M Debt Misstatement Claims Considers Legal Action

SoFi Technologies, Inc. (NASDAQ:SOFI) is one of the top Robinhood stocks with high potential. On March 17, SoFi Technologies, Inc. (NASDAQ:SOFI) announced it was considering legal action against short seller Muddy Waters Research.

Source: Pexels.com

The legal action is in response to the short seller confirming a short position in the stock, alleging a material misstatement of at least $312 million in unrecorded debt. The short seller stated that there is a possibility of more extensive misstatements yet to be detected. It further said that SoFi Technologies Inc. (NASDAQ:SOFI) is a financial engineering treadmill and not a healthy, growing origination business.

Muddy Waters has also accused the company of pursuing loans and off-balance-sheet structures that disguise borrowings as revenue, a move that has led to stock dilution. It also alleges that the $1.054 EBITDA delivered appears inflated by $950 million through manipulated charge-off rates, seller-financed sales, and unrecorded borrowings.

SoFi Technologies has refuted all the allegations, calling them factually inaccurate and misleading.

“We have reviewed the full report and believe it is designed ​to deceive ​investors. SoFi maintains strong confidence in the integrity of our financial ​reporting,” the fintech said.

SoFi Technologies, Inc. (NASDAQ:SOFI) is a digital financial services company and bank that serves as a “one-stop shop” for managing money. It provides lending (student, personal, and home loans), banking services (checking and savings), and investing tools, alongside technology platforms (Galileo and Technisys).

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