A prominent short-seller, Hindenburg Research, has accused Carvana Co., an auto retailer, of financial manipulation in a report titled “Carvana: A Father-Son Accounting Grift for the Ages.” The firm claims that Carvana’s subprime loan portfolio carries substantial risk and its growth is unsustainable.
Hindenburg took a short position on Carvana’s stock after conducting research, including interviewing former employees. The report alleges that Carvana has lax underwriting standards. Furthermore, it suggests that the company uses a subsidiary owned by the father of CEO Ernest Garcia III to artificially boost results.
Source: https://www.bloomberg.com/news/articles/2025-01-02/carvana-short-seller-report-from-hindenburg-claims-accounting-grift