LendingClub begins its 1st quarter principally reporting with FVO. Apples-to-apples comparison to $SOFI: $LC effectively has Day 1 FV mark of ~104; SOFI marks at ~109. Both audited by @DeloitteUS BUT different engagement partners. Julie Sonigo (LC) much more experienced than Robert Lee (SOFI)
In other words, $SOFI engagement partner Lee has less experience and much more at stake wrt the client’s audit fees relative to his career fee earnings. See auditroom dot io for details on each engagement partner.
LendingClub begins its 1st quarter principally reporting with FVO. Apples-to-apples comparison to $SOFI: $LC effectively has Day 1 FV mark of ~104; SOFI marks at ~109. Both audited by @DeloitteUS BUT different engagement partners. Julie Sonigo (LC) much more experienced than Robert Lee (SOFI)
Business Insider covering our letter to $SOFI board https://t.co/yRLjVTcoSU
@WinnerInvestor @marketswithmay My people, in that interview, I was referring to other transactions (loan pools that had been securitized). Our position was and remains that $SOFI a) improperly booked the $312 mm borrowing as a loan receivable sale b) to support manipulated whole loan sales c) that support unwarranted FV gains.
SOFI is involved in multiple loan transactions and two things can be true: ABS market documentation practices are loose and SOFI improperly accounted for the transaction.
The Fed cut 50 bps on Sept 18. Twelve days later $SOFI "sold" a 5% receivable at exactly par. A buyer should have paid a premium. A lender advancing against collateral wouldn’t https://t.co/YMW3tMWiei
~$1B in reported EBITDA traces back to one $312M transaction. If it’s a borrowing — as the UCC documents say it is — $SOFI should restate and claw back management bonuses https://t.co/YMW3tMWiei
The "buyer" of the $312M $SOFI receivable was SoFi Funding PL VI LLC — SOFI’s own subsidiary https://t.co/YMW3tMWiei
$SOFI borrowed $312M from JPMorgan and booked it as a sale. The UCC filing uses the word "Borrower." The CFO used the word "sold." Both can’t be true https://t.co/YMW3tMWiei
@siyul @stoked_on_waves The connections - logical to you or not - are 1) that BUR inflated past profits and its balance sheet by aggressively marking Petersen, 2) management exited significant shares before the concentration of profits and asset values in one case was known, 3) when aggressively predicted profits fail to materialize, the profit machine works in reverse - the company has effectively lost outsize money and has a significant balance sheet impairment, causing significant losses to investors holding the stock on the day that becomes apparent.
$SOFI books aggressive future profits on dates of loan origination because management gets paid to do so. The same was true of $BUR w cases.
FV accounting is a great theory, but often a real world license to screw shareholders.
While you can’t reliably predict the outcome of litigation, our lasting contribution to $BUR was to show in 2019 how much of the balance sheet was really FV gains on the YPF litigation. $BUR.LN is a great example of how problematic Level 3 FV assets can be (looking at you $SOFI) https://t.co/6nVQi9NyPL
MW’s elevator pitch on $SOFI from @SquawkCNBC this morning - “SOFI’s superpower is borrowing money and turning the borrowing proceeds into loan sales”
https://t.co/lobmiXQpqE
About to go on @SquawkCNBC to talk about our $SOFI short!
$SOFI institutional ownership is markedly lower than its peers. We hear from others that SOFI regularly stonewalls on hard questions. Ask yourself why SOFI won’t answer institutional questions. Here are our 11 unanswered questions: https://t.co/UQDqSTRPzT https://t.co/5iCgTOlI2a
Noto bought $500K of $SOFI the day of our report. He’s already extracted $46.5M through instruments identical to stock sales. That’s ~1% of what he’s taken off the table. 11 questions, 0 answers: https://t.co/UQDqSTRPzT
We asked $SOFI 11 questions before we published. It answered zero. The only response was to have the in-house lawyer demand to know who we are. It’s been 5 days since the report. We’re still waiting. Our unanswered questions: https://t.co/UQDqSTRPzT
$SOFI “intends to explore potential legal action against Muddy Waters”… https://t.co/t0b9GaWDt3
After adjusting for what we view as inflated marks, off-balance-sheet borrowings, and capitalized expenses, we reduce $SOFI's 2025 Adjusted EBITDA by ~90%—from $1,054M to $103M. Management gets paid for diluting you. https://t.co/Jzm98lXWlf
In the process, $SOFI appears to have borrowed $312M that we believe is not reported in its financials. The Loan Platform Business that replaced Secured Loans looks like disguised borrowing booked as fee income—analogous to Enron's VIEs. https://t.co/Jzm98lXWlf
$SOFI's Loan Platform Business isn't a capital-lite tollbooth—it appears to be disguised borrowing booked as fee income, structurally analogous to Enron's VIE structures. We also see $312M of apparently unrecorded debt. https://t.co/Jzm98lXWlf
$SOFI's "Secured Loan" business is really seller-financed whole loan sales. SOFI lends ~80% of UPB to buyers purchasing its own loans. We believe these fail all three criteria for sale recognition under ASC 860. https://t.co/Jzm98lXWlf
$SOFI's Student Loan business appears to exist primarily to generate Fair Value gains for management bonuses. SOFI used a discount rate 27bps BELOW the 10-yr Treasury—implying a negative risk premium on consumer credit. https://t.co/Jzm98lXWlf
We calculate $SOFI's real Personal Loan charge-off rate at ~6.1% vs. the 2.89% reported. Loans are disposed of days before the charge-off threshold, understating losses that feed into Fair Value models producing ~$259M in unwarranted gains. https://t.co/Jzm98lXWlf
MW is short $SOFI. We believe SOFI is a financial engineering treadmill—not a healthy origination business. GE Capital-style marks, Enron-esque off-balance-sheet structures, and relentless dilution. https://t.co/Jzm98lXWlf
