Hindenburg Research has taken a short position against Carvana, claiming the company’s recent turnaround is an illusion supported by unstable loans and accounting manipulation. The report highlights Carvana’s loan sales and the relationship between CEO Ernie Garcia III and his father, major shareholder Ernest Garcia II. Hindenburg alleges $800 million in questionable loan sales to an undisclosed related party and suggests that Carvana is hiding delinquencies by extending loans. The report raises concerns about the Garcias’ influence over the company and has prompted a 3% drop in Carvana’s stock, which surged nearly 400% in 2023.
