Shares of SoFi Technologies Inc (SOFI) are trading lower during Thursday's premarket session. The digital lender is facing a one-two punch: heavy allegations from a prominent short-seller and broader market weakness. It's the kind of day where a company has to defend its accounting while also watching the overall market head south.

The decline follows a turbulent week for the fintech firm. Broad market indices are also under pressure, with Nasdaq futures down 0.71% and S&P 500 futures off 0.59% Thursday morning, adding to the selling pressure.

The Muddy Waters Allegations

The main catalyst is a report released on Tuesday from Muddy Waters Research, led by Carson Block. The firm didn't mince words, labeling SoFi a "financial engineering treadmill." The core allegation is that SoFi's 2025 adjusted EBITDA was inflated by a whopping 90%. Muddy Waters suggests the true figure is around $103 million, which contradicts the reported $1.05 billion. Block also raised eyebrows by questioning what he called "Enron-esque" off-balance-sheet structures. It's the kind of comparison that gets everyone's attention in finance.

SoFi's Forceful Rebuttal

SoFi management didn't take this lying down. The company characterized the claims as showing a "fundamental lack of understanding" of their business. On Wednesday, they went a step further, signaling intent to "explore potential legal action." Management stated the report was "designed to deceive investors" and pointed to Muddy Waters' own disclosures that the firm intended to cover short positions immediately after publication. "They stand to profit from their own misleading report," SoFi added. It's a classic he-said-she-said, but with legal threats on the table.

Short Interest, Insider Moves, and Technicals

Bearish bets against the stock are increasing. Short interest in SoFi rose from 123.21 million to 128.39 million shares, representing 10.29% of the company's public float. That's a meaningful amount of people betting the stock goes down.

Recent insider data shows mixed signals. On one hand, CEO Anthony Noto bought 28,900 shares at $17.32 on March 17, which is usually seen as a vote of confidence. On the other hand, CTO Jeremy Rishel executed a "sell-options" transaction totaling $4.48 million between March 16 and 18. Insiders sell for lots of reasons, but it adds another layer to the story.

Technically, the stock is under pressure. SoFi is trading 8.5% below its 20-day simple moving average and 32.2% below its 100-day average, keeping the intermediate trend pointed down. While shares are up 34.96% over the past 12 months, the current price is positioned closer to the 52-week low of $8.60 than the high of $32.73. The RSI is at 29.38, which is in oversold territory, and the MACD is at -1.0796 versus a signal line of -1.1528.

SoFi Technologies shares were down 2.04% at $16.83 during premarket trading on Thursday, according to market data.