SoFi Due Diligence/SoFi CEO Argued With Me on X About The Meaning of His Stock Purchase Yesterday & Whether His Prepaid Forward Was Sale

So I published a negative report on SoFi a few days ago. In the meanwhile, I have been dipping my toes in X commenting about SoFi. SoFi investors are excited that Anthony Noto purchased stock yesterday. He had appeared on a Youtube retail investor focused interview show a few weeks ago alluding to waiting until March to purchase, with the wait due to "tax implications," so investors were expecting it.

My response to all the comments was basically the purchase was for optics, Mr. Noto had no need to purchase more stock, he has plenty. In fact, part of my bear theory on SoFi is that it is optics/narrative obsessed, but has some serious issues which I learned about via deep due diligence. (So this exchange kind of tied into my bear analysis)

I also pointed out (in other posts) that SoFi insiders had sold $85M worth of shares since 2024, whereas they had only bought $2M. So if you go by insider transactions, you should be bailing from SoFi.

Well, sure enough Mr. Noto jumped into the conversation and he corrected me for my apparent misimpression of his motivation in purchasing the stock.

My specific comment regarding Mr. Noto's purchase was:

"It's a negative indicator. It means he buys when he is concerned about the stock getting too low and he needs to boost morale. AnthonyNoto has plenty of SoFi stock and doesn't need more. It's symbolic."

Mr. Noto's response was:

"You are guessing. You don't know because you haven't asked. No need to guess you can ask me. There is only one reason I buy SoFi it's because I think it's a great risk reward DESPITE the concentration. I am a blue color kid from Poughkeepsie and no matter how much money I have $1 million is a ton of money and I have a thousand other ways to spend it or use it that would be meaningful and impactful to people and organizations that are near and dear to me and my family. BTW a prepaid forward is not a sale it's a way to finance liquidity. I can roll it forward each time before expiration if i want (many times) and keep participating in the upside and not resulting in a sale and tax event. Look at the price point of the ceiling and that might make you more informed about how I think about value in a given time period. No need to guess it's all researchable and when you can't find the answers just ask me. And Going forward I will correct your mistakes. This time I will give you the benefit of the doubt. WDW"

Anyone who wants to read the exchange can find it easily on X.

I will leave it to the reader to judge who is right and wrong on Mr. Noto's motives and obviously I am not in his head. But where he is definitely in error is whether a prepaid forward is a sale under securities laws. It 100% is treated as a sale under securities laws. If it wasn't a sale, he wouldn't had to file a Form 4 and 144 regarding the sale. But he did file both forms. Since it is a sale, under swing sale rules, he was prohibited from buying for six months, from August through February. i.e. the tax implication rationale he gave during the Youtube interview was in error. I can only speculate, but I imagine that Mr. Noto did not want to get into the technicalities of the prepaid being a sale under securities laws during the Youtube interview.

Back on X, I was able to immediately call him out on 1) the tax implication excuse, and 2) that securities laws treat prepaid forwards as sales. The reply also gave me the chance to see if he could answer some pointed questions I had posted on X previously, like why do SoFi affiliates keep getting payroll tax liens filed against it and why do Federal Reserve metrics show that SoFi is in the bottom 5% of banks with more than $10B in assets on capital efficiency and overhead metrics. These are some pretty serious issues, among other things, that I uncovered during my due diligence. (Haven't seen any investor analysis or media coverage of any of it). He hasn't answered any of it (and I assume he won't) But I hope he does!

If anyone is interested, I will be posting a fuller DD soon here. Below is a mini-preview DD:

Mini SoFi DD:

·       **Fair Value.** SoFi uses models to value its loan inventory. Non-cash adjustments over par go straight to earnings. SoFi used to get a lot of heat for this back in 2022/2023 (since the adjustments were all on paper, and SoFi’s models showed that its loans were far more valuable than peers). Problem has not gone away. Historically and currently SoFi’s loan valuation model treats its unsecured consumer and student loans as less risky than investment grade corporate bonds. SoFi papered over these issues by originating more and more new loans (with artificial model gains) to wash out paper losses being taken on older overvalued loans as they pay off or are sold. There are lots of subtle indications of this:

o   Servicing volume/gross income up while net servicing income trends down and turns negative (2025). (Full data only available via Federal Reserve filings, only some relevant data in SEC filings). Servicing assets are valued at fair value like loans, and this data is consistent with a “bleed back” of overvalued assets

o   Federal Reserve fillings show $700M ($547M, removing $173M in hedges) in FV adjustments flowing straight to earnings. That’s more than the $482M in net income for 2025. This full data is also omitted in SoFi’s SEC filings.

o   Based on all the serious FV model issues, there is very good reason to believe that there should be $0  or negative FV adjustments, i.e. wiping out all profit and then some. Same situation for last year. This is extremely dangerous for SoFi’s regulatory capital situation, as these “earnings” flowed through to equity, and loans in inventory make up a huge portion (70%) of SoFi’s asset base.

·       **Sky High Customer Acquisition Costs, Low Return.** SoFi’s central strategy is to be a diverse, one stop shop of consumer finance – banking, investments, loans, financial advice, etc. In fact, SoFi’s business is about 81% loans (interest earned, selling loans, servicing loans). SoFi has paid a very heavy price acquiring marginal customers to grow its “one shop” initiatives and has industry high customer acquisition costs, undermining its “nimble/efficient” depiction of itself.

o   SoFi’s high CAC can be seen just by comparing financial data across SEC filings. I did so through Q3 2025, and SoFi’s spend on CAC was higher than peers Upstart, LendingClub, Pagaya, Oportun, and Capital One.

o   Federal Reserve BHCPR data confirms that SoFi’s basic efficiency metrics sit beyond the 95th percentile of its peer group across multiple measures. Example: total overhead is 7.37% of avg assets vs 4.20% at the 95th percentile peer. That’s 75% ABOVE 95th percentile peer. On an income basis, overhead is 85.98% of adjusted operating income vs 76.61% at the 95th percentile. In other words, SoFi has incredibly poor overhead and efficiency metrics vs. traditional banks. Which is ironic because SoFi pitches itself as nimble.

o   FFEIC (bank regulatory data) shows that SoFi’s bank deposit size metrics are comically low compared to peers ($3.5k vs $17k at Synchrony, $24 at Ally Bank, $38k at Lending Club, $43k at American Express, etc.

o   Forms filed with SEC show that SoFi Wealth’s assets under management metrics show the same pattern: lots of small accounts - average size of $5.2K. More akin to a micro-brokerage like an Acorn ($2.1k) or Stash ($1.8k) than full service brokerages (e.g. Betterment: 47k, Wealthfront $66.8k, Vanguard $429k)

**Tech Platform.** SoFi spent $2B+ acquiring tech companies. Tech is only about 9% of the company’s revenue. And the Tech Platform is a money-loser. The Tech Platform’s earnings have become increasingly reliant on increasing “intercompany fees,” which is SoFi’s other segments “paying” the Tech Platform. The fees don’t flow through to consolidated earnings. Without intercompany fees, and without a one time $33M cancellation fee from Chime in Q4, the Tech Platform would have lost money in Q4 2025. Yet SoFi refused to take an impairment. SoFi’s CEO repeatedly told investors the tech platform was monetizing existing clients with new deals, using identical language, in call after call. The footnotes in SoFi’s filings showed otherwise.

Layered on top of this is that multiple state and federal payroll tax liens have been filed against SoFi affiliate Social Finance, astounding for a bank affiliate, as that reflects either severe liquidity or control issues, along with many other regulatory red flags (like losing its Florida mortgage license for several months due to failure to respond to regulators).

Links to a couple of relevant documents:

[Social Finance 2025 California Tax Lien](http://bnewhard.com/Social_Finance_2025_California_Tax_Lien.pdf)

[Social Finance 2024 Federal Payroll Tax Lien (Salt Lake County)](http://bnewhard.com/Social_Finance_Federal_Payroll_Tax_Lien_Salt_Lake_County_2024.pdf)

[Florida Office of Financial Regulation Order Denying SoFi Lending Corp Mortgage Renewal Application](http://www.bnewhard.com/final_order_florida_ofr_october_2025.pdf)

I was able to dig up a lot of this by looking at unimpeachable sources outside of SoFi’s securities filings and releases (i.e Federal Reserve reports, credit rating reports, bank call reports, investment advisory regulatory forms, state filings, etc.) That is what is concerning to me – so much of this is material, and SoFi could have shared the same information in its securities filings, but didn’t. I hope SoFi’s management ultimately provides the transparency they have recently assured investors will be provided.

I found an interesting quote from an early 2000’s NYT profile on Mr. Noto (in bold) that I kept coming back to as I did my DD.

**Some of those mistakes were noticed by Goldman Sachs's own technology bankers, who made tough-minded critiques of Mr. Noto in an evaluation of his work from August 1999 to July 2000, a period that included the early months of the Nasdaq collapse. In the evaluation, a managing director in Goldman's corporate finance division said that "Anthony undermines his credibility by appearing as more of an advocate/defender (or at worst a company spokesman) for his companies' success rather than as an unbiased analyst." Mr. Noto declined to comment on the evaluation.**

My position: I am short SoFi. This is not financial advice. More details to come in a more detailed DD post.