In Short Seller’s Crosshairs: A Former VP And Trump Billionaire Ally
Hindenburg Research is targeting used car juggernaut Carvana in its latest investigation, which also takes aim at former veep Dan Quayle and Cerberus, an investment firm led by Trump’s billionaire deputy defense secretary nominee Stephen Feinberg.
Former U.S. Vice President Dan Quayle speaks to the media in the lobby at Trump Tower in New York, U.S., on Tuesday, Nov. 29, 2016 in New York City. Photographer: John Angelillo/Pool via Bloomberg
Carvana, the online used car dealership, has been one of the best performing stocks in the last few years: Shares quadrupled in 2024 and are up nearly 50-fold from late 2022. On Thursday, Hindenburg Research, the short seller that has previously targeted the Adani Group and Roblox, took aim at the high flyer, alleging that Carvana’s spectacular turnaround is “a mirage” and that its leaders – the father-son duo of Ernest Garcia II and Ernest Garcia III – are running an “accounting grift for the ages.” Carvana’s stock closed down about 2% Thursday, while the major stock indices inched down by less than 0.4%.
Few Carvana watchers will be surprised by Hindenburg’s claims, which include allegations of “related-party accounting games” involving DriveTime Automotive, a chain of used car dealerships owned by father, Garcia II. For years, Carvana and the Garcias have been targeted by skeptics, short sellers and investor lawsuits over corporate governance and financial accounting concerns, which the firm has repeatedly denied and fought in court.
