Carvana Co.
Short

CVNA Carvana Sell-Off: Hindenburg Research Short Position

712
If you haven`t bought CVNA at $25:
CVNA Carvana Options Ahead of Earnings


Carvana Stock Now Faces Major Risks: A Price Target of $127

Carvana Co. (CVNA), currently trading at $199, faces mounting scrutiny after allegations from Hindenburg Research. The short-seller’s report, titled “Carvana: A Father-Son Accounting Grift for the Ages,” accuses the company of unsustainable growth fueled by lax underwriting standards and questionable insider dealings.

Key Concerns:

Insider Selling: CEO Ernest Garcia III and his father, Ernie Garcia II, sold $3.6 billion in stock between 2020-2021, with an additional $1.4 billion sold last year after a 284% stock surge.

Loan Portfolio Risks: Claims suggest Carvana approves nearly all loan applicants, increasing exposure to subprime defaults as economic conditions tighten.

DriveTime Transactions: Allegations of inflated revenues through sales to DriveTime, owned by Garcia II, raise conflict-of-interest concerns.

Manipulated Results: Extensions on subprime loans reportedly delay delinquencies, misrepresenting financial health.

Outlook:
While the stock has shown resilience, we believe these risks significantly outweigh the rewards. With questionable accounting practices and a vulnerable loan portfolio, our price target is $127.

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