Carson Block doesn’t need fancy algorithms or AI to sniff out corporate BS. The founder of Muddy Waters Research has spent nearly 16 years hunting down companies that are basically running a shell game, and his track record speaks for itself—he’s never lost a legal battle. Not once.
His latest target? SoFi, which Block describes as a “financial engineering treadmill.” Translation: the company’s using accounting tricks that would make Enron blush to hide what’s really going on under the hood.
So how does Block actually find these companies? Turns out, it’s refreshingly low-tech.
The Transcript Deep Dive
Block’s secret weapon isn’t some sophisticated data model. It’s literally printing out four years of earnings call transcripts and reading them cover to cover. Sounds tedious? Maybe. But that’s exactly the point. While most investors skim or listen passively, Block is hunting for the tells—emotional language that shouldn’t be there, big initiatives that mysteriously vanish, and questions that go unanswered.
“If things appear too good to be true, they are,” Block told Business Insider. And he’s got receipts. He spotted AppLovin rising too fast, too furiously, with insiders bailing out. Same story with Elf Cosmetics. The stock was soaring, but something didn’t add up internally.
The SoFi Playbook
SoFi checked all his boxes. The company looked great throughout 2025, then hit a wall in early 2026. A capital raise that diluted shareholders should’ve been a red flag for everyone, but apparently wasn’t. Block’s team dug deeper, called investor relations repeatedly, and got… nothing. Radio silence. That’s when you know something’s rotten.
Why Quantitative Screening Fails
Here’s where Block gets real: most quantitative screening is garbage. It looks good on a spreadsheet but misses the human element—the dodging, the deflecting, the carefully worded non-answers that executives are trained to deliver.
Block prefers behavioral cues. He looks for emotional language in transcripts, initiatives that get dropped without explanation, and questions that mysteriously go unanswered. It’s detective work, not data science.
The Undefeated Record
“We get sued a reasonable bit,” Block said with the confidence of someone who’s never actually lost. Sixteen years in the game, and Muddy Waters is still standing. That’s not luck—that’s methodology.
The takeaway? While Wall Street obsesses over earnings multiples and growth rates, Block is reading between the lines. He’s looking at what executives aren’t saying, what initiatives disappeared, and what the company’s really doing behind the accounting curtain.
It’s a reminder that sometimes the best investment research isn’t about having the fanciest tools. It’s about reading the room—or in this case, the transcript—and trusting your gut when something smells off.
