Why SoFi Stock Plummeted 32% in the First Half of 2026

SoFi Technologies (SOFI) plunged 32% in the first half of 2026 after Muddy Waters released a short-seller report alleging accounting irregularities. The stock traded at 41x trailing earnings when the report hit, leaving little cushion for negative headlines despite underlying business strength.

The fintech posted 41% revenue growth and record loan originations during the period, with core lending and member acquisition metrics remaining robust. However, the premium valuation amplified downside when Muddy Waters raised concerns, triggering a sharp selloff across the first six months of the year.

SoFi's underperforming Tech Platform segment added pressure to investor sentiment. While the company's lending business continued to expand at a strong pace, the weakness in its technology unit created a mixed narrative that compounded valuation concerns.

The disconnect between operational performance and stock price reflects market sensitivity to short-seller allegations at elevated multiples. At 41x trailing earnings entering 2026, SOFI offered limited downside protection when Muddy Waters published its report, creating the conditions for the steep first-half decline.