Hindenburg Research Shorts Carvana

(RTTNews) - Short seller Hindenburg Research has reportedly taken a short position against used-car retailer Carvana Co. (CVNA), according to Reuters.

"Our research uncovered $800 million in loan sales to a suspected undisclosed related party, along with details on how accounting manipulation and lax underwriting have fueled temporary reported income growth," Hindenburg stated in its report, as reported by Reuters.

Carvana, along with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. The platform allows customers to research and identify vehicles, inspect them using the company's 360-degree vehicle imaging technology, secure financing and warranty coverage, purchase vehicles, and schedule delivery or pick-up from their desktop or mobile devices. Additionally, the company operates auction sites. Founded in 2012, Carvana is based in Tempe, Arizona.

According to the report, Hindenburg's research team conducted 49 interviews with industry experts, former Carvana employees, competitors, and related parties. The team concluded that Carvana's turnaround story is a "mirage."

The report also highlighted that Carvana faced bankruptcy risks in 2022 and 2023. Despite these challenges, the company's stock surged by 284% in 2024, a development scrutinized by the short seller.