SOFI Shares Slip After Muddy Waters Takes Short Position — What’s The Rationale?
Synopsis
Muddy Waters alleged in its reports that SoFi Technologies have material misstatement of at least $312 million of uncensored debt.
Short seller Muddy Waters Research on Tuesday revealed a short position on SoFi Technologies (SOFI) and alleged that the financial technology firm had a material misstatement of at least $312 million of unrecorded debt.
“If we are correct, it raises the possibility that there are more extensive misstatements we have not detected,” Muddy Waters said in its report.
“SOFI is a financial engineering treadmill, not a healthily growing origination business. SOFI shareholders are incessantly diluted so management can hit bonus targets through GE Capital-style loan marks and Enron-esque off-balance-sheet structures that disguise borrowings as revenue,” it added.
Shares of SOFI fell nearly 5% at the time of writing.
Get updates to this developing story directly on Stocktwits.
Stay updated with all the latest Business News, including market trends, Share Market News, stock updates, taxation, IPOs, banking, finance, real estate, savings, and investments. Track daily Gold Price changes, updates on DA Hike, and the latest developments on the 8th Pay Commission. Get in-depth analysis, expert opinions, and real-time updates to make informed financial decisions. Download the Asianet News Official App from the Android Play Store and iPhone App Store to stay ahead in business.