(Reuters) – Short seller Hindenburg Research said on Thursday it was short on used-car retailer Carvana Co.
“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,” Hinderburg alleged in its report.
Carvana did not immediately respond to a Reuters request for comment on the report.
Shares of the Tempe, Arizona-based company fell as much as 5% after the report but pared losses to trade down 1.5%.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shreya Biswas and Anil D’Silva)
Hindenburg Research has recently released a scathing report on used-car retailer Carvana, casting doubts on the company’s business practices and financial stability. The report alleges that Carvana has been engaging in deceptive practices, including selling cars with major undisclosed damage and misleading customers about their vehicle history.
Hindenburg Research’s short on Carvana has sent shockwaves through the investment community, with many investors reconsidering their positions in the company. The report raises serious concerns about Carvana’s ability to maintain its rapid growth and profitability in the face of increasing scrutiny and competition in the used-car market.
As investors weigh the implications of Hindenburg Research’s report, Carvana’s stock price has taken a hit, raising questions about the company’s long-term prospects. In light of these developments, it will be crucial for investors to carefully evaluate the risks and potential rewards of investing in Carvana moving forward.
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